India, with the second largest population in the world, is all set to emerge as the third largest aviation market in the world. According to a report released by the industry bodies, released at the India Aviation 2016 in Hyderabad, India’s domestic aviation market has registered a growth of 20% in 2015 with 81 million trips and the pace was likely to accelerate further this year. This was the highest growth rate in civil aviation in the world, the report prepared jointly by the Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG said. The passenger throughput was likely to reach 370 million by 2020, with that of 80% domestic traffic, the report said.
The number of international passengers stood at 45.4 million with a 7.6% growth.
The report also made several key recommendations to the Central Government on how to fuel the further growth by extending a helping hand to the industry and increasing the air connectivity. The report, released by the Union civil aviation Minister Ashok Gajapathi Raju, also criticised `30000 cr bailout package for Air India.
“This money can instead be used to reduce VAT on ATF and reimburse the States for their losses for 3-5 years”, the report said.
The report attributed the high rate of growth of air passengers to many factors including an open air policy allowing the entry of new players in the Indian market, increasing disposable incomes, fall in aircraft turbine fuel, private public partnership policy, airport modernisation, allowing the private players to operate overseas and the increased FDI limits for the airlines and other sub-sector.
The report also hailed the Government’s plans to revive and operationalise another 160 airports in the country and said that if they were chosen carefully, the move will improve the air connectivity to various regions and remote areas. The report called for more connectivity to the two and three tier cities.