Indian airlines turn their attention to regional market

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With the second phase of growth in Indian aviation expected to come from Tier-II and Tier-III cities, almost all domestic airlines are looking to connect these smaller cities for expansion. The regional market is currently under-penetrated and demand is growing at nearly double the pace at the metros amid escalating disposable incomes and economic growth. Airports Authority of India (AAI) expects air traffic from non-metro airports to rise to 45% of total air traffic in India in the next few years, up from 30% at present.

To support this regional growth, greenfield airport development is occurring at Tier-II and Tier-III cities. There are currently 14 approved greenfield airports projects in India, 13 of which are in regional centres. The only exception is the much-delayed Navi Mumbai Airport. The Government has also launched a plan to develop an indigenous-manufactured aircraft to support continued expansion in this arena.

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