India is the fastest growing aviation market in the world. Last year, nearly 100 million of its 1.3 billion citizens flew on domestic routes. The number of passengers have been growing at more than 20% for the past two three years. The country is vast. Due to growing aspirations buoyed by increasing income, swathes of people want to travel to different parts of the country on planes. The flip side is that India is one of the world’s toughest aviation markets. Aviation is largely unorganized. The private jet industry is struggling. Aviation is still elitist. One key impediment to Indian aviation achieving its true potential is that information is so difficult to come by. The flying public, investors and other aviation stakeholders don’t know where to turn to for information.
The mainstream stream media largely ignores aviation. On most days, there will be one or maybe two articles on aviation. Those articles barely scratch the surface of such a huge and dynamic industry. One of the reasons for the sector’s long neglect by the government has been this poor and erratic coverage.
The aviation audience is vast, the interest huge. Few sectors have as packed a community of users and stakeholders as aviation. This includes industrialists, the flying public, pilots, planespotters, crew, management, enthusiasts, analysts, bureaucrats, trainers, and photographers. On any given day, a news item on aviation comfortably makes it to the most-read section of any news website.
Yet, Indian aviation remains a big unknown. One gets a sense of it every day on Twitter — from travellers, businessmen, even journalists. Aviation stakeholders in India are desperate for information – on costs, experiences, regulations and opportunities. The flying public, for example, would like to know which airline has the best on-time performance to a particular airport. They want to know the facilities and costs of a lounge. Airline executives want to know about the travel trends to a particular region. Industrialists want to know the best private jets from say, the Delhi airport. Interviews of private jet owners reveal that even industrialists are unable to understand aviation. “Big businesses would take to a great piece of journalism than a commercial,” said one owner. Such examples are legion.
Though 100 million may seem a big number, truth is only a fraction of India’s population flies. But India’s geographical location, its vastness and huge domestic market — 30 crore middle class — are huge enabling factors.
India has also traditionally lacked strong airlines with extensive global networks and efficient and attractive airports. Air connectivity hasn’t moved beyond the large metropolitan cities to Tier 2 and Tier 3 towns. Currently 40% of domestic capacity is deployed on connecting just the six largest cities to each other. The second and third largest airports in India are congested. India’s estimated active general aviation (GA) fleet at 393 aircraft is around 65% larger than the scheduled airline fleet. Yet the sector remains extremely neglected. It is underdeveloped in terms of airports, airspace, maintenance and training. The total cargo Indian airports handle pales in comparison with airports like Hong Kong, Memphis, Shanghai and Incheon which alone handle more throughput than all Indian airports combined.
Yet there are several positive attributes. India is the ninth largest civil aviation market in the world with a market size of USD16 billion. In 2016, growth in India's passenger traffic was over six times more than that of the US, which clocked the second-highest growth rate of 4.1%, according to Airports Authority of India. India has 125 airports, including 11 international airports. There are 7 national airlines and a number of regional carriers (in 2005, there were just 4 airlines). The largest airline IndiGo has placed two of the biggest plane orders in history, the last for 250 A320Neo aircraft, to exploit a highly under-penetrated market. The number of non-scheduled airline operators has touched 125 from 36 operators in 2000. The General Aviation fleet in India is the second largest in Asia Pacific. Air cargo, though just around 1-2% of the global cargo movement, contributes to around 32-35% by value of cargo shipped. The aviation sector in India provides an indirect and induced employment to over 1.2 million people.
And the future bodes well. Indian aims to become the 3rd largest market by 2020 and the largest by 2030. It has an ideal geographical location between the eastern and western hemisphere, a strong middle class of about 30 crore Indians and a rapidly growing economy. With per capita incomes rising, increasing value of time and the growing propensity for leisure and tourism will result in more and more Indians taking to flying. Thanks to plenty of growth drivers such as the government’s 'open-skies policy', which allowed several new carriers to enter the market, greater access of foreign carriers and opening up of international routes at regional airports, increased foreign direct investment limits for airlines and other sub-sectors of the industry like airports, air cargo, ground handling etc, aviation is set to grow exponentially. A new aviation policy which promises to take flying to the masses by making it affordable and convenient is in place as is a regional connectivity that promotes new regional airlines.
India's biggest strength is its population. For example, if every Indian in the middle class income bracket takes just one flight in a year, it would result in a sale of 35crore tickets, more than five times from two years ago. The government aims to enable 30 crore domestic ticketing by 2022 and 50 crore by 2027, and international ticketing to 20 crore by 2027. Similarly, cargo volumes should increase to 10 million tonnes by 2027. India would require over 250 brownfield and greenfield airports by 2020. This would attract more supporting infrastructure, finance and human resources. According to certain estimates, the incremental human resource requirement in aviation by 2025 would be around 3.3 million.
It is the growing air transport segment in India that Rede, my platform devoted to Indian aviation, will target. With commercial aviation as the focus area, I strongly believe Rede will find takers in airlines, ground handling companies, airports, non-scheduled operators, charter firms, travel Agents and tour companies, MROs, OEM manufacturers, tourism boards, duty free companies, catering firms, aviation training centres and colleges offering air transport related subjects, among others. No other branch of aviation will give Rede such a broad platform of readership like this one. Rede will target decision makers, strategists, professionals, including marketers, and aviation enthusiasts in this segment.
Data source: DGCA, Indian government, Capa and KPMG.