India's Ministry of Civil Aviation noted (28-Dec-2012) that civil aviation has been identified as one of the most important growth engines essential for the economic growth of the country. The Ministry noted: "Air transport in India has witnessed enormous growth in the recent past. During the last 10 years, compounded annual growth rate of passenger traffic has been approximately 15%. A key trend in the business model of the Indian Carriers in the domestic operations is that the domestic traffic is rapidly shifting to Low Cost Carriers (LCC). From a level of about 1% in 2003-2004, the market share of LCC including the LCC arm of full service carriers is today exceeding 70% of the total domestic traffic". Looking forward, the Ministry expects that India is likely to be the fastest growing aviation market in the world in the next 20 years. The Ministry noted, "Estimates suggest that the domestic air traffic will touch 160–180 million passengers per annum in the next 10 years and the international traffic will exceed 80 million passengers per annum from the current level of 60 million domestic and 40 million international passengers respectively. According to International Air Transport Association’s Airline Industry Forecast 2012-2016,India's domestic air travel market would be among the top five globally, experiencing the second highest growth rate". [more - original PR][more - CAPA India Outlook]
India expects domestic pax to reach 160-180m p/a in next 10 years, international pax to exceed 80m
You may also be interested in the following articles...
Finnair and TAP Portugal: their location based long haul niche strategies compared
Both Finnair and TAP are based in peripheral corners of Europe: Finnair in the extreme northeast and TAP in the southwest. Both are based in countries with relatively small populations, but they have developed networks that capitalise on their geographic location to carry connecting traffic from across Europe and elsewhere to long haul destinations in other continents.
TAP's main long haul market is Upper South America (primarily Brazil), but it also has a secondary long haul niche in Africa. Finnair's main long haul market is Northeast Asia, with an additional presence in South and Southeast Asia. Both also operate to the US. On short haul, LCC competition has been a bigger threat to TAP than to Finnair, but cost savings are important to both.
TAP and Finnair have similar traffic volumes, unit costs and average trip lengths. Moreover, both have struggled to generate sustainable profitability. This report compares and contrasts Europe's two leading independent exponents of the location based long haul niche strategy. Both are set to accelerate their long haul growth.
airBaltic: the hybrid LCC punches above its weight; back to growth and positive EBIT in 2016
For Latvia's national airline, 2016 was a pivotal year. Riga-based airBaltic completed a multi year restructuring programme, increased its passenger numbers for the first time in five years, secured a capital increase and a private investor, and became the launch customer for the Bombardier CS300. On 28-Mar-2016 it further celebrated its successes by announcing a return to positive EBIT, alongside a net profit, for last year.
It has achieved its turnaround in the face of strong competition from foreign LCCs, justifying its positioning as a "hybrid LCC". Data provided to CAPA confirm that its unit cost level is also broadly consistent with the LCC tag. It is now seeking further investment from a strategic investor – preferably another airline. It also faces a decision about the replacement of its Dash 8 turboprop fleet.
AirBaltic CEO Martin Gauss told CAPA that the airline plans for passenger growth to accelerate from 12% in the past year to 16% in 2017, taking traffic levels back above 3 million passengers. For an airline based in a country inhabited by only 2 million people, this suggests that airBaltic has been making some judicious network decisions.