India aviation outlook: A more favourable environment slowly emerging


After the dramatic changes of the last five years, the Indian aviation market is seeing the emergence of a more favourable environment. India's GDP growth slowed from over 9% in 2007/08 to 6.1% in 2008/09. However, given the contraction globally, this was a relatively a good result. The economy appears to be recovering earlier than expected, with GDP growth of 7.9% in the last quarter, ahead of expectations.

The World Bank projects annual growth of 8.0% per annum from 2011 to 2014.

Domestic air traffic is also showing a return to growth. After 12 consecutive months of year-on-year declines in domestic traffic, July 2009 saw a return to positive territory, which has continued since then.

India Monthly Domestic Passenger Numbers Last 12 Months

This is partly due to the impact of a lower base resulting from last year's decline, the industry is reporting a discernible increase in demand as business and consumer confidence increases, although yields continue to remain depressed.

CAPA India has prepared a 22-page summary of the prospects for Indian aviation in 2010. The report can be downloaded by clicking here.

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