New Delhi: About 1000 Indians accustomed to air travel, perform nearly 20 trips in a year as against 60 in China and 2300 in United States. This comparison clearly reveals that aviation has not made much penetration amongst Indians, if you look at global flying trends. This was brought out in the latest study jointly carried out by Assocham and Ernst & Young.
The study points out that India is one of the least penetrated markets for air travel as it is among the most expensive in the world with air penetration levels lower than even its neighbours like Sri Lanka, Pakistan and countries with poorer GDP like Ethiopia and Nigeria.
Reasons for lower aviation penetration
* Absence of proper infrastructure including international airports, domestic aerodrome conveniences, air control and navigational facilities.
* Smaller countries like Malaysia with 1/50th of India’s population flies more passengers annually and in Sri Lanka and Pakistan, average air travel is around 30 as against 20 of India.
* 40% passenger traffic in India is concentrated in the two main airports of Delhi and Mumbai. Top five airports in India account for over 70% traffic and the top 25 account for almost 95% of air traffic in India. These airports have limited tunnel facilities, outdated infrastructure, inadequate ground handling system and poor passenger amenities, leading to high traffic congestion at the airports.
* Segment of luxury and super luxury travellers is nearly 70 times the air traveler segment. Number of passengers using premium rail services (air-conditioned and first class) in recent times was about 52 millions, more than three times the number of airline passengers (15.3. million). In most other countries, air traffic is a large multiple of premium rail traffic.
* Skewed distribution of travellers provides a profitable opportunity for low cost carriers. Comparable economy of China during 1980-2000 experienced a passenger traffic growth of 17% CAGR, when its GDP per capita reached the threshold.
* India has more than 400 airports which can be connected by air and currently less than 100 are serviced despite the entry of new airlines. The feeder routes segment in Indian aviation still remains highly under served. The continuing increase in air traffic on the trunk routes has kept the major network carriers focused on these routes. Presently, almost 25% of the total domestic movement in the country is between top 6 metros
Tourism driven economies like Thailand and Indonesia see a passenger count of 21.2 million and 9.4 million per year respectively. In India, tourism is an important industry accounting for 2.5% of GDP and ranks as the 3rd largest foreign exchange earner.
The regional market has been treated as an adjunct to the trunk routes with the result that convenient flights are not available on a large majority of such routes leaving a significant potential market in tier-II cities. Currently, other than Indian airlines, only the LCCs like Air Deccan, GoAir link tier II cities to the metros.
* India has more than 400 airports which can be connected by air whereas currently only less than 100 are serviced despite the entry of new airlines.
* Feeder routes segment continue to remain underserved. Continuing increase in air traffic on trunk routes has kept major network carriers focused on these routes. Presently, almost 25% of total domestic movement in the country is between top six metros. Alter this scenario.
* Put in place sound infrastructure for both national and international tourists.
* Increase number of air fleet from 250 to 1000 within the decade.
* Indian airspace should add capacities of around 15-20% CAGR over the next 5-6 years and cater to growing opportunities in the sector.