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.