NEW DELHI, May 17: India is expected to be a power house for future airline growth driven by the eagerness of people to travel and growing population, according to a report.
In a report, the Netherlands-based ING Bank NV said India is set to deliver strong structural growth figures, and airlines are preparing for this with historically large orders for new aircraft from carriers Indigo and Air India.
“The country plans to open a range of new airports, and strategically located countries – such as the UAE, with the world’s second largest airport in terms of passenger traffic in Dubai – are anticipating strong transit passenger growth from Asia,” it said.
The report focusing on the outlook for the global aviation sector also noted that the long-term global growth outlook — 20 years — has generally been tempered in the post pandemic era to a range of 3-4 per cent annually instead of 5-6 per cent, with Europe seeing the lowest growth figure.
Further, it said that one of the main reasons is that flying is set to become significantly more expensive with rising costs of emissions.
Domestic travelling within large countries was the area first to recover, with its average already hitting pre-pandemic levels last year. But differences across regions are prevalent, the report said and added that in the US and China, traffic figures started 2024 beyond pre-pandemic levels.
“Domestic travelling in India and China will continue to push global airline growth (more on this below). But more importantly, lagging international (and intercontinental) travelling is returning with more strength, and this will propel airline mileages in 2024,” it added.
Also, the report said the eagerness to travel combined with a growing population turns “India into powerhouse for future airline growth”.
In little over a year, Air India and IndiGo have announced plans to purchase up to 170 wide-body planes. When narrow-body aircraft orders of Air India, IndiGo and Akasa Air are added to the list, the order book is well over 1,200 planes and that too in less than 14 months or since February 2023.
As per the report dated May 16, just 10 per cent of the global population – in upper-middle and higher income groups – is responsible for almost 90 per cent of passenger traffic.
While mentioning that there is a strong correlation between airline travelling and GDP and household income, the report said that particularly in Asia, it seems a propensity for travelling is on the rise.
“With an expanding middle class and improving household incomes, the customer base for airline travel is swelling. This is even more important than population growth. Despite environmental concerns, younger generations appear to travel more often than older generations, which also adds to the potential in countries such as India and Indonesia,” it added.
India is one of the world’s fastest growing civil aviation markets. (PTI)