The domestic air travel market in India witnessed almost a 17 pc growth year-on-year during the January-July 2017 period. Almost 65.72 million travellers chose to fly intra-country in the first six months. While 86.5 pc of them travelled on private carriers, 13.5 pc boarded Air India.
Is India capitalising the potential of the growing middle class along with factors such as low fuel cost and liberalised foreign direct investment (FDI) in the second half of this decade? With the National Civil Aviation Policy in June 2016, regional air connectivity got a huge boost. The Mumbai-Delhi corridor has emerged as one of the busiest aviation routes in the world; however, there are rural networks that are in the road map of the Regional Connectivity Scheme (RCS) that are yet to materialise.
Civil Aviation Minister P Ashok Gajapathi Raju said earlier last week that the thrust in the second round of Ure Desh ka Aam Nagrik (UDAN) will be on improving connectivity to priority areas such as the North East, Jammu & Kashmir, Uttarakhand, Himachal Pradesh, Andaman & Nicobar Islands and Lakshadweep by introducing more operational flexibility and promoting helicopter operations.
The Minister informed that the changes in the second round of UDAN had been brought in after extensive consultations with stakeholders over the last four months.
According to a performance report published by the Ministry of Civil Aviation based on the data submitted by various domestic airlines, the domestic airline industry in India has registered a growth of 17.18 pc. While 56.09 million passengers air travelled during the Jan-July period of 2016, the numbers rose to 65.72 million this year.
The overall cancellation rate of scheduled flights for the month of July 2017 was 0.79 pc. While most of the cancellations were attributed to technical snag (54.2 pc), the new airline Zoom Air had the maximum cancellation rate of almost 76 pc. Private airlines such as Indigo, SpiceJet, Vistara, Jet Airways, Air Asia were well below 1 pc while Air India got 1.6 pc of their flights cancelled in July.
Baggage, customer service and flight problems remained the most registered problems among the 678 issues raised by the travellers flying in domestic in July.
The list of complaints illustrates that the major issues rose by domestic air travellers in India. Fare, refund, staff behaviour remained below and showed improvement; issues with baggage and customer service still remains a major concern for airline flying on domestic routes.
Airports – a tricky business
Moreover, what looks like a promising commercial outlet in the aviation business; the airports business despite strong growth in passenger numbers every year are not as profitable as it seems to be.
The understanding of sustained financial health in the Indian aviation sector, especially in the airports, remains a challenge. Last year, the Airports Authority of India (AAI) registered a net profit of more than INR 25 billion; however, only 13 of the 125 airports managed by the AAI were profitable.
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India, considered as the third largest domestic civil aviation market in the world and predicted to be the worldwide third largest aviation market by 2018 looks at a plethora of opportunities and improvements.
As Indian air travellers continue to look for more value for their money, the market will remain cost centric. The aviation sector is trying to develop its own unique model with cost efficient investment in infrastructure, sensible capacity management and timing of investment, reasonable taxation, freedom to do business and effective use of technology. For the booming domestic air travel market, business and reactions are growing with time to find an amicable sustenance amid fluctuating economic conditions.