13-Jan-2015 5:30 PM

India’s aviation leaders assemble at CAPA India Summit 2015: Profitable growth is around the corner

Analysis

After facing a constant stream of economic, regulatory and structural challenges that has resulted in India's airlines losing a combined USD11 billion over the last eight years, Indian aviation could be on the verge of entering a new era of profitable and sustainable growth.

But this is by no means a certainty. Falling oil prices and improving economic condition provide a favourable backdrop, but all of the key stakeholders will have to play their part for the sector to recover and thrive.

Meanwhile, a new round of airport privatisation, renewal and construction is under way, with all the associated investment needs and opportunities.

CAPA India will hold a major event in Mumbai on 3/4-Feb-2015 to address these and other vital issues.

Summary

Indian aviation industry has faced significant challenges, resulting in losses of USD11 billion over the past eight years.
Falling oil prices and improving economic conditions provide a favorable backdrop for the sector's recovery.
A new round of airport privatization, renewal, and construction is underway, presenting investment opportunities.
The Indian government needs to take decisive actions to remove red tape and create a competitive environment for the aviation industry.
India's air traffic is projected to triple within a decade, making it a significant growth market for global aviation.
The CAPA India Aviation Summit 2015 will address key issues and opportunities in the Indian aviation market.

A time for action in 2015

In 2015 India's government will need to take decisions that have been put off for too long. And industry players will need to learn to operate in an open and competitive environment and allow vested interests to take a back seat. If this can be achieved, Indian aviation has massive potential that can be unleashed, delivering huge benefits to tourism, trade and the economy.

The new government elected in mid-2014 came to office with an agenda of removing red tape and distortions. After several months of consultation and preparation, the time has now arrived for tangible actions.

Indian air traffic is projected to triple within a decade, creating huge opportunities for the global aviation community

India is currently the 9^th largest aviation market in the world by total seat capacity, but could rise to become the third largest in less than a decade. Currently 62% of that capacity is domestic and 38% international.

India international v. domestic seat capacity share, week of 12-Jan-2015 to 18-Jan-2015

IndiGo is the largest carrier in the domestic market with almost 35% of capacity by seats at present, with LCCs in total (including SpiceJet, GoAir and AirAsia India) accounting for just over 60%.

The two major Indian full services carriers, Air India and Jet Airways, are the leading operators in the international market and together they have around a quarter of the market. Emirates is the largest foreign carrier with a seat capacity share of 10.1%. The next three largest foreign carriers - Etihad, Qatar Airways and Air Arabia - are all from the Gulf.

India international seat capacity share by airline, week of 12-Jan-2015 to 18-Jan-2015

Indian carriers also operate extensive services to the Middle East, as a result of which 49.8% of all international seats from India are to the Middle East and 29.7% are to the UAE alone.

The Indian government's decision to roll-out electronic visas to 43 source markets - including the largest single market, the US - in Nov-2014 is expected to transform inbound tourism and provide a boost to international traffic.

Due to the overwhelmingly positive response in just the first few weeks, the Ministry of Tourism has requested that the Ministry of Home Affairs extend the scheme to key European markets such as the UK, France and Germany as well as China.

Despite recent challenges there is widespread confidence in the Indian aviation market's fundamentals

Confidence in the growth prospects of the market is illustrated by the fact that three leading global airlines, Etihad, Singapore Airlines and AirAsia have invested more than USD600 million in Indian carriers over the last two years.

And the order book of incumbent Indian carriers is almost twice the size of the current fleet in service.

Indian carrier current fleet and aircraft on order as at 12-Jan-2015

Many of these are for delivery in the near future. over the next two years two new aircraft per month are anticipated to be delivered.

And this is scheduled to rise to around one delivery each week in 2018:

CAPA India Aviation Summit 2015 is the must-attend event for companies with an interest in the market

With these opportunities in mind, the CAPA India Aviation Summit 2015 has been called at short notice in order to help shape important decisions at this critical juncture.

The Summit, the 10^th that CAPA has convened in India, will take place at The Leela, Mumbai on 3-4 February 2015 and will be the pre-eminent network and knowledge-building event for any organisation with an interest in Indian aviation.

Meet all the key aviation industry and government leaders and investors as they discuss India's aviation future.

Key topics for discussion will include:

Will India's airlines return to profitability in the next 12 months?
Do investors have the appetite to fund airline restructuring, growth and start-ups?
If fuel tax can be slashed, could India become the lowest cost market in the world?
Will a focus on ancillaries transform the viability of airlines in India?
Which is the right airline business model for the Indian domestic and international markets?
Which are the fastest growing international outbound markets and how much of a boost will inbound tourism receive from the introduction of electronic visas?
What would the abolition of the 5 year/20 aircraft rule mean for international traffic?
Can Gulf and Asian carriers expect to secure increased access to the Indian market?
What has been the experience of PPP airport operators in India?
What is the status of greenfield airport tenders for Navi Mumbai and Goa Mopa?
How much interest is there in the privatisation of airports in Chennai, Kolkata, Ahmedabad and Jaipur?
What is the secret to creating a viable regional aviation sector?
Could Air India and the Airports Authority of India really be privatised?
Is the government finally ready to give India the civil aviation policy it deserves?
What are the key opportunities for global aviation businesses if the Indian market is set to triple in size over the next ten years?

Early bird registration discounts expire 15-Jan-2015

With an audience of around 200 critical decision-makers from one of the leading growth markets in global aviation, including C-level participation by virtually every airline and airport operator in the country, this is an event where business will be done.

For more information and to register visit: https://www.capaevents.com/ehome/index.php?eventid=111116&

BACKGROUND INFORMATION

As the leading aviation advisory, research and knowledge practice in South Asia (www.capaindia.com) with a portfolio of more than 100 consulting and research studies completed in the region, CAPA has produced extensive reports on the Indian market. For some insights, please see:

India's aviation: new leadership holds the promise of positive change, but there is much to do

Goa launches a PPP tender for construction of a greenfield second airport

India's budget provides a boost to tourism and airport retail, but no relief for airlines - yet

India airports Public Private Partnership model is transformational but key lessons to be learned

India's airlines are heading for another big loss in FY2015 - but good news may be around the corner

CAPA Report: India's air traffic management system prepares for transformational change

India's Civil Aviation Agenda: CAPA proposals for the new administration to restart the industry

Third party ground handling business in India could increase by USD130 million overnight

Air India finally to enter the Star Alliance. Lufthansa now looks to escalate Gulf carrier rhetoric

CAPA India Bilateral Policy Report: Emirates secures additional seats to India after 6 year wait