Passenger traffic in India set for 7% growth in 2025
Long-term aviation sector demand from China and India will drive growth in the Asia Pacific region which is projected to remain the largest market for air travel, with an anticipated growth rate of 5.1% per annum.
Projecting this regional market outlook, Singapore-based Joshua Ng, Director of US-headquartered Alton Aviation Consultancy, noted that the global air traffic has returned to pre-pandemic levels. “We expect the aviation industry to continue its long-term growth trend of 4% per annum from 2024 to 2034, supported by a 2.7% annual growth in global GDP,” he underscored.
Ng is especially bullish on prospects in the Indian aviation sector https://www.iata.org/.
India’s passenger traffic is expected to continue growing at a strong pace of 7% in 2025, supported by an orderbook of nearly 1,900 aircraft among airlines based in the country, he pointed out.
India, which contributes approximately 10% of Asia Pacific’s domestic and international air traffic demand, has already returned to pre-pandemic levels http://civilaviation.gov.in.
A growing middle class and increasing affordability of air travel, fuelled by increasing low-cost carrier penetration, are among key drivers of positive outlook on the Indian aviation sector.
“Such growing demand in turn supports India’s massive aviation development programmes including setting up of 150 airports across the country,” Ng said http://aai.aero.
But the supply based on orderbook from India will take a couple of years as Airbus and Boeing ramp up production capacities. Major aircraft deliveries face a backlog of 9.7 years, Ng said, citing data from Centre for Aviation (CAPA) and Alton’s own analysis.
Given the supply chain constraints and backlog of airplane orders faced by major OEMs such as Airbus and Boeing, Air India and Indigo will also be backing the emerging Maintenance, Repair and Overall (MROs) as it and other global airlines would retain older aircraft, have them retrofitted to cope with an increasing traveller demand, according to Ng.
“The recent merger between Air India and Vistara is also expected to bring more stability to the industry, with Air India and IndiGo emerging as the two primary players in the full-service and low-cost carrier segments respectively,” he underlined.
However, the competitive landscape between IndiGo and Air India is intensifying as they each make forays into the other’s core markets, Ng noted in the Alton’s latest outlook.
IndiGo has recently introduced a business class offering, marking its entry into the premium and business traveller segment – a market traditionally dominated by Air India and other international full-service carriers.
On the other hand, the Air India Group is focusing on capturing smaller domestic markets through its low-cost subsidiary, Air India Express, according to Ng’s observation.
“This strategic pivot is supported by the recent removal of business class cabins on Air India Express flights, aligning the subsidiary’s operations with a cost-efficient, low-cost carrier model,” he added.
Order backlog for A320neo aircraft is 7,216, and the 10-year forecast average annual production rate is 741, implies 9.7 years of backlog, he pointed out, citing data from Alton’s “Aviation Outlook 2025 – Supply Chain Challenged”.
Amid multi-year backlogs for popular aircraft from Airbus and Boeing, the Commercial Aircraft Corporation of China (COMAC) has seen a potential opportunity to challenge the Boeing-Airbus duopoly.
COMAC is accelerating production of the C919, with plans to ramp up its manufacturing rate over the next few years to meet its growing order book, while Embraer has reportedly been considering an entry into the narrowbody segment, according to Alton’s outlook for 2025.
“For COMAC to significantly expand its market presence, however, it would need to pursue aircraft certification outside of China,” Ng believes.
Additionally, airlines will be cautious, requiring a strong operational track record from COMAC’s active C909 and C919 aircraft, according to the Alton outlook http://china-airlines.com.
However, prime among these challenges are the supply chain and labour shortage issues that COVID-19 has left as a long-lasting legacy.
“Strategies to be considered include looking to technology and automation solutions to increase the productivity of labour resources, or reviewing strategic sourcing initiatives in order to get around material shortages,” said Ng.
For airlines in particular, the focus is also on how to maximize the use of aircraft resources – reducing turnaround times or optimizing schedules in order to increase daily utilization. Some have even turned to wet-leasing aircraft to supplement their capacity – although doing so will depend heavily on specific route economics, he noted. Fiinews.com
