India seen becoming third largest aviation market by 20252 min read . Updated: 25 Oct 2017, 04:27 AM IST
By 2036, India will have about 478 million air passenger traffic, which will be more than that of Japan and Germany combined, says IATA
New Delhi: India is set to become the third largest aviation market one year earlier than originally expected, the International Air Transport Association (IATA) said in a report on Tuesday.
IATA, which represents about 85% of the global airline traffic, projects India to overtake the UK to become the third largest air passenger market by 2025. China will be the top market, followed by the US.
In a similar report last year, IATA had projected India to overtake the UK by 2026.
“The biggest driver of demand will be the Asia-Pacific region. The region will be the source of more than half the new passengers over the next two decades...the UK will fall to fifth place, surpassed by India in 2025, and Indonesia in 2030," IATA said in the report.
The point at which China will displace the US as the world’s largest aviation market (defined as traffic to, from and within the country) has also moved two years closer since last year’s forecast.
“We now anticipate this will occur around 2022, through a combination of slightly faster Chinese growth and slightly reduced growth in the US," IATA said.
By 2036, India will have about 478 million airline passenger traffic, which will be more than that of Japan (just under 225 million) and Germany (just over 200 million) combined.
India’s current passenger traffic is about 141 million.
The most critical number will, however, be the doubling of overall passenger traffic globally from 4 billion to nearly 7.8 billion passengers in 2036 on a 3.6% compound annual growth rate (CAGR).
“All indicators lead to growing demand for global connectivity. The world needs to prepare for a doubling of passengers in the next 20 years. It’s fantastic news for innovation and prosperity, which is driven by air links. It is also a huge challenge for governments and industry to ensure we can successfully meet this essential demand," Alexandre de Juniac, IATA’s director general and chief executive officer, said in the report.
Indian airlines have over 800 planes on order and in the next five years alone are set to add 350-400 aircraft. All Indian airlines put together have a fleet of around 500 aircraft currently.
India is likely to overtake Japan and Germany to become the third largest economy in the next 10 years, HSBC Holdings Plc said in a September report.
According to HSBC’s estimates, India will be a $7 trillion economy in 2028, compared to less than $6 trillion and $5 trillion for Germany and Japan, respectively.
Presently, India’s gross domestic product (GDP) is around $2.3 trillion (fiscal 2016-17).