Friday, May 24, 2024

Indian Travel Congress 2023: Untapped Potential & Rapid Urbanisation To Propel Aviation Market Growth

By Staff Correspondent

In an analysis that augurs well for India’s aviation industry, sector experts have expressed optimism about the significant untapped potential in the market. They cite the rapidly expanding middle class and a burgeoning youth population, both with an inclination towards travel, as key drivers of this growth. This view was reiterated by prominent industry leaders at the recent Indian Travel Congress 2023 in Colombo, convened to stimulate tourism in the economically beleaguered island nation.

Industry professionals observe that the privatisation of airports in India has significantly boosted the sector, leading to substantial investment in both new and existing infrastructure. Notable attendees of the event included high-profile individuals such as Nipun Aggarwal, Chief Commercial & Transformation Officer of Air India, IndiGo’s Chief Executive Officer, Pieter Elbers, Richard Nuttall, CEO of SriLankan Airlines, and Amitabh Khosla, the International Air Transport Association’s (IATA) Country Director for India.

While the COVID-19 pandemic dealt a heavy blow to the aviation and tourism sectors, the industry stalwarts agreed that both have demonstrated resilience and are on the right path to recovery. This sentiment was articulated during a panel discussion on ‘India Tourism Vision 2047: A Transformed Landscape of Experiences and Connections’ at the 67th annual Travel Agents Association of India (TAAI) convention.

Air travel in India has vast room for growth, with Aggarwal pointing out that current air travel penetration in India remains modest at 0.1 trips per capita compared to China’s 0.5. India’s burgeoning middle class, rapidly urbanising populace, and sizeable young demographic are all factors that bode well for the sector’s expansion. Although India ranks as the third-largest aviation market, its market size remains a fraction of that of the US or China.

Furthermore, Aggarwal envisages the aviation industry expanding by five to six times from its 2019 figures of 200 million passengers to more than a billion over the next few decades. His view is reinforced by IATA’s Director General Willie Walsh, who spoke of the “massive opportunities” within India’s dynamic aviation market during the IATA Annual General Meeting in Istanbul.

Domestic and short-haul travel comprise the main segments of the Indian aviation market, but Aggarwal contends there is substantial untapped potential in the long-haul sector. Privatisation is opening the industry to a large market segment that has previously remained untapped.

India’s Ministry of Civil Aviation (MoCA) mirrors this outlook, projecting long-term solid growth, especially in light of India’s position as the third-largest domestic market globally regarding seat capacity, despite being 18th in international seat capacity.

Building traffic in the region presents “enormous potential”, according to IndiGo’s CEO Elbers, who revealed the airline’s plans to operate new flights from India to Jakarta and Nairobi. He also drew attention to IndiGo’s historic order of 500 aircraft from Airbus, the most significant single aircraft order ever placed by any airline.

In another panel discussion titled ‘Sky is not the Limit’, Khosla, IATA’s Country Director for India, predicted India to become the third-largest global aviation market this decade. While short-term infrastructure and supply chain hurdles exist, the broader growth trajectory must be revised.

The opportunities for Sri Lanka in the aviation sector are also “massive”, according to Sri Lankan Airlines CEO Nuttall. The airline is working towards returning to pre-Covid levels in the next 12-18 months, with plans underway for a new terminal that will double its current capacity.

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