According to the latest market analysis report by the International Air Transport Association (IATA), India is fast emerging as a major global aviation market. India’s domestic air travel continues to grow strongly and as of February, it was just 2.2 percent short of reaching pre-pandemic levels as measured by passenger revenue kilometers (PRK). India’s domestic passenger market also led the rest of the domestic markets including US, China and Japanese domestic markets in the Passenger Load Factor (PLF) metric in the report. It has been the top home market as measured by PLF for the past four months, achieving 81.6 per cent in February, 85.2 per cent in January, 88.9 per cent in December 2022 and 87.9 per cent in November 2022.
Global air connectivity continues to recover in 2023.
As of March, overall international air connectivity stood at 79% of its pre-pandemic level, demonstrating steady improvement despite a slowdown in economic activity through 2022 and earlier this year.
1/ pic.twitter.com/o4xwptdkKZ— IATA (@IATA) April 29, 2023
Globally, traffic is now at 84.9 percent of February 2019 levels. Based on RPK, total traffic in February 2023 increased by 55.5 percent as compared to February 2022. Capacity has increased by 176.4 percent in the last few months since travel restrictions were lifted in the region and load factor has increased by 34.9 percentage points to 82.5 percent, the second highest among regions.”
Domestic air passenger traffic for all markets measured for February rose 25.2 percent compared to a year ago. Total February 2023 domestic traffic was at 97.2 per cent of February 2019 levels. At present, it is estimated that only about 35 to 40 million Indians travel by air every year. Although World Bank data shows that pre-COVID India had about 168 million air transport passengers, many are frequent fliers. This is far less than China, which has a similar population and 660 million air transport passengers during the same period in 2019.
Chinese airlines also have about five times as many aircraft. With a booming middle class and rising incomes, along with the right incentives including low airfares, many, including airline companies, are expecting India to become the fastest growing aviation market in the years to come. Swiss airline intelligence provider, C-Aviation, reported in March this year that French Finance Minister Bruno Le Maire had said that Indigo Airlines would bring “several hundred” Airbuses to the Paris Air Show to be held at Paris Le Bourget airport in June. May announce an order for the planes. ,
India’s largest airline IndiGo has over 300 aircraft and currently provides over 35 per cent of the available seat kilometers on flights in and out of India’s airports. Measured by flight frequencies, IndiGo serves around 48 per cent of all flights in India’s international and domestic markets.
In February itself, rival Air India announced a world record order for 470 aircraft – 250 from European manufacturer Airbus and 220 from its US rival Boeing. The deal beats a 2017 order for 420 aircraft by IndiGo and an order for 460 aircraft by American Airlines in 2011.
Also Read – With Air India’s 470 Aircraft Deal; Indian Airlines has 1,100 aircraft on order
Apart from aircraft manufacturers, foreign airlines are also eyeing the Indian aviation market. Singapore Airlines is one of them. Following the takeover of Air India by Tata Sons, it announced an investment of USD 267 million in the revamped airline, giving it a 25.1 per cent stake in the new Air India group. This adds to the money it has already put into Vistara Airlines which is to be merged with Air India.
SIA issued a statement during the announcement saying, “The merged entity will be four to five times larger than Vistara, with a strong presence across all major airline sectors in India. The proposed merger will strengthen SIA’s presence in India.” Will do.” , strengthen its multi-hub strategy, and allow it to participate directly in this large and rapidly growing aviation market.”
Etihad Airways under new CEO Antonaldo Neves is another airline that plans to expand its presence in India’s aviation market. In an interview with Reuters published on 27 April, the former CEO of TAP Air Portugal said that: “Etihad’s priority is India.” The country is among its top three markets, he said, but declined to name the other two. He said Etihad, which flies to places such as Delhi and Mumbai, has identified six other Indian cities where it does not serve but is looking to start flights. He also announced plans to double Etihad’s fleet to 150 aircraft by the end of the decade and triple the number of passengers carried to 30 million annually.
The Middle Eastern airline’s expansion plans will focus on medium- and long-haul destinations, and the airline will avoid operating ultra-long-haul flights, where it may be harder to make money. Neves explained that the goal would be to connect Europe and the East Coast of the United States with places like China, Southeast Asia, India and the Gulf countries. Neves said he expected Etihad’s growth to be organically dependent on more code sharing and interline agreements. It will not consider mergers or equity partnerships, as it has done in the past. It had a stake in the now defunct Jet Airways. Abu Dhabi’s sovereign wealth fund ADQ took full control of Etihad last October and appointed Neves, who previously led the turnaround at Portugal’s TAP.
While in the past, Etihad looked set to grow at any cost, this is set to change. Neves stressed that growth would only be possible with profitability, especially as the airline is now owned by ADQ. As he explained, “Our mandate is very clear, we don’t go places where we don’t make money.”