Sunday, January 02, 2022

Competition to soar in 2022 as new players enter aviation sector

New Delhi: Competition is expected to soar in India's aviation sector during 2022, as new players enter the industry along with deeper penetration of air transport in the hinterland.

Accordingly, a new airline as well as more privately operated airports are expected to increase competition in the sector that has faced the brunt of the ongoing pandemic. Besides, expanding regional and intra-regional presence will continue to widen the scope of the industry.

Moreover, passengers will gain from increased competition, Centre from divesting airport assets and the workforce from more professional opportunities in the aviation sector.

In terms of airlines, in 2021, Jet Airways and Air India found new owners. "The cherry on the cake was the launch of Akasa Air underpinning the future prospects of this sector in India," said Jagannarayan Padmanabhan, Director and Practice Leader, Transport & Logistics, CRISIL Infrastructure Advisory.

"Competition will continue to be strong across the airlines, it's important that the sector learns from the previous misadventures of undercutting prices to gain or maintain volumes."

In the medium term, the sector's growth is expected to come from the tier 2 and tier 3 cities, for which it is necessary to augment capacity as well as open up new regional airports.

"While Covid-19 has led to uncertainties in the airport sector, the established regulatory framework, as well as the growth potential in the Indian market over a long term, would continue to attract private developers," said Vishal Kotecha, Director, India Ratings and Research.

Notably, there have not been any bids in the airport space over the past two years. However, 2019 saw a significant number of bids in the airport sector with the Adani Group winning six airports, GMR and Zurich airports being awarded one airport each."There was a significant interest seen from both domestic as well as international players in these bids," said Kotecha.

01/02/22 IANS/Deccan Herald

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