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IndiGo is largest domestic carrier in India, one of the world’s fastest growth aviation market

IndiGo was the largest single carrier in the Indian domestic market in Oct-2011, ahead of Jet Airways, with struggling Kingfisher Airlines falling to third place. SpiceJet emerged as the fastest growing carrier in the month, while Kingfisher was the slowest growing carrier in the market. With up to 55 daily service cancellations this month, Kingfisher will likely continue to see passenger number and market share losses in the coming months. This could result in slowing growth in Nov-2011 and Dec-2011.

India is currently the fastest growing domestic market in the world after Chile, with growth expected to continue despite the current financial challenges experienced by key players in the Indian aviation market. India’s domestic air travel market continued to show impressive growth in the first 10 months of 2011, with passenger numbers increasing 18.3% to 49.6 million passengers, averaging out at 4.96 million passengers per month.

Indian airlines turn their attention to regional market

With the second phase of growth in Indian aviation expected to come from Tier-II and Tier-III cities, almost all domestic airlines are looking to connect these smaller cities for expansion. The regional market is currently under-penetrated and demand is growing at nearly double the pace at the metros amid escalating disposable incomes and economic growth. Airports Authority of India (AAI) expects air traffic from non-metro airports to rise to 45% of total air traffic in India in the next few years, up from 30% at present.   

To support this regional growth, greenfield airport development is occurring at Tier-II and Tier-III cities. There are currently 14 approved greenfield airports projects in India, 13 of which are in regional centres. The only exception is the much-delayed Navi Mumbai Airport. The Government has also launched a plan to develop an indigenous-manufactured aircraft to support continued expansion in this arena.

India is world’s fastest growing aviation market as double-digit domestic growth continues

The Indian market continues to be seen as an area of "huge opportunity and huge potential”, IATA CEO and Director General, Tony Tyler said upon the release of the revised full-year financial forecast this month, adding that India is the fastest growing aviation market in the world at present, followed by Brazil, driven by rapid domestic growth.

However, IATA warned that infrastructure and taxation woes could hurt the industry. “There are some issues in India, particularly in infrastructure and so on, which are possibly a problem and constraint for the industry there. We encourage the Government to make the necessary investment. But the potential for these markets is enormous,” Mr Tyler said. While noting the Airports Economic Regulatory Authority (AERA) had a “critical role to play in bringing much needed regulation to this area”, Mr Tyler expressed concern about the “high levels of taxation” in the country as well as other charges paid by international carriers at Indian airports.

Double-digit traffic growth continues in Indian domestic market

India’s airlines reported domestic passenger growth of 18% in 1H2011. India is now the ninth largest and fastest growing civil aviation market in the world with the Indian government expecting India to become one of the three largest markets in the world by 2020.