India’s airline market is growing rapidly but is still underdeveloped

Source: The post India’s airline market is growing rapidly but is still underdeveloped has been created, based on the article “IN SOAR NEED-on India’s aviation sector” published in “Business standard” on 23rd May 2024.

UPSC Syllabus Topic: GS Paper 3-economy-infrastructure (Airways)

Context: India’s airline market is growing rapidly but is still underdeveloped compared to China and the US. More Indians are flying, but still very few overall. Airlines are ordering more planes to meet increasing demand and expand internationally.

For detailed information on Opportunities and Challenges for Aviation Sector in India read this article here

What is the current status of India’s airline?

Growth: India’s airline capacity reached 230 million departing seats this year, nearly double that of a decade ago.

Comparison: India’s capacity is a fourth of China’s and a fifth of the US’s.

Penetration: Only 3% of India’s population, or 40 million people, fly regularly.

Fleet: India has 771 aircraft, with 150 more expected this year.

Expansion: IndiGo and Air India are ordering new planes, including long-haul models like the A350-500.

International Share: International carriers hold 56% of outbound international flight capacity from India.

Why is airline penetration low in India?

Railways Comparison: Indian Railways carries as many passengers in one day as airlines do in a year, highlighting the preference for rail travel.

Per Capita Capacity: India’s domestic per capita seat capacity is 0.13, much lower than China’s 0.49 and the US’s 3.09. Even Thailand has a higher capacity at 0.51.

Economic Barriers: Many Indians may not afford air travel frequently due to economic constraints.

Infrastructure and Fleet: Limited fleet size and infrastructure also contribute to low penetration. India has 771 aircraft, with more on order, but still lags behind China and the US.

What is the future of India’s airline?

Capacity Growth: India’s airline capacity is expected to nearly double to 400 million departing seats in 7-10 years.

Fleet Expansion: India plans to add 150 aircraft this year, increasing its total fleet to 3.2% of the global fleet. Indian carriers have ordered over 2,100 new planes.

International Expansion: Indian carriers like IndiGo and Air India are expanding their international operations. IndiGo has ordered 30 A350-500 planes for long-haul flights.

Government Support: The Indian government is encouraging airlines to enhance their international presence, aiming to make India a global aviation hub.

Economic Growth: India’s fast-growing GDP and rising population suggest increased future demand for air travel.

Question for practice:

Discuss the current status, challenges, and future prospects of India’s airline industry.