Indian aviation emerges from turbulence with new opportunities. Relighting the Flame

Indian aviation is emerging from a turbulent period marked by a hostile cost environment, continued regulatory uncertainty, declining traffic and steep financial losses. But for 2013 there are signs of a turnaround.

An improved alignment between capacity and demand has seen yields strengthen and several airlines are now making profits, at least in the peak quarters. And following one of the most significant developments of 2012, the decision to allow 49% foreign airline investment, the sector may see more than one such transaction in the coming year. This will have a significant positive impact, in terms of capital and sentiment, in raising the professionalism of the sector and bringing India's market in line with 21st century global aviation.

New aircraft orders will be placed in 2013/14 as the market starts to look ahead to the next phase of growth. But cost pressures and a weak policy environment will continue to be a challenge.