Ranking fastest growing aviation markets

India's ranking drops to second position


September 7, 2017

/ By / New Delhi

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A fall in the domestic passenger demand is being cited as one of the reasons responsible for pushing India to the second position in the category of fastest growing aviation markets in the world. But there are other factors as well.

According to July’s data by global airlines’ body, International Air Transport Association (IATA), India is now the world’s second fastest growing domestic aviation market, losing the first position to its neighbouring country China.

“China tops the domestic chart for just the 2nd time in 28 months, but the upward trend in India has picked up,” IATA said, adding that passenger demand remains on course to grow solidly this year as a whole.

July 2017 saw India registering a growth of 12.5 pc, whereas Chinese market grew 15 pc during the same period. The growth is measured using Revenue Passenger Kilometres (RPK) – an indicator of demand.

“Year-on-year growth in domestic India RPKs slowed to 12.5 pc in July – its slowest pace since November 2014. That said, a very strong month-on-month increase in seasonally-adjusted RPKs in July meant that annual RPK growth managed to remain in double digits for the 35th consecutive month,” IATA said.

Despite indication of a slow growth, strong upward seasonally adjusted traffic trend appeared to have reasserted itself in recent months, the IATA said.

“As is the case in China, demand continues to be stimulated by sizeable increase in the number of domestic routes served,” it added.

IATA also said that, globally, easing in the seasonally-adjusted industry-wide RPK trend also reflects a reduced degree of stimulus to demand from lower airfares.

Increasing oil prices due to which airlines are hiking fares is also leading to a fall in passenger traffic growth, subsequently impacting the domestic air traffic growth rates.

“All told, the strong first half of the year and the robust start to the peak summer period means that 2017 is on course to be another year of above-trend RPK growth.

“However, the moderation in demand drivers suggests that the upward trend in H2 2017 and into 2018 is likely to be somewhat weaker than was seen in the same period of 2016,” it said.
Growing congestion at airports in Delhi and Mumbai are being linked to the fall.

“Unless the government acts fast on infra addition and multiple airports in metros, we will see a Mumbai-like crunch at more and more cities in coming years. Today Indian airlines have ordered hundreds of planes but no one even knows where they will be parked,” an airline official said.

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