Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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It is hardly an exaggeration to claim that India’s aviation industry has taken off. Rakesh Jhunjunwala’s Akasa Air received its first Boeing 737 Max aircraft in the most important boost to the sector, allowing it to capture a considerable percentage of the aviation market share. As Akasa Air prepares to begin in July and Jet Airways plans to re-launch its services, the highly competitive low-cost carrier (LCC) category will see a chokehold of operators. The aviation sector may begin to contribute to the entire economy as the economy recovers after nearly two years of losses, and the second half of 2022 may see an unanticipated rise in airline takeoffs.

One of the world’s largest domestic aviation markets is certainly brewing with a whole host of new entrants, as Tata took over Air India’s operations. Despite the European crisis, Airbus India head Remi Maillard was recently quoted as saying that the aviation traffic will soon recover by the second half of next year, on the back of strong demand. According to certain statistics, it has been stated that India will replicate the international market’s performance in the coming 20 years. According to Maillard’s estimates shared with The Economic Times, passenger traffic in India will expand at a rate of roughly 6.2 percent per year by 2040, which is greater than the global average of 3.9 percent.

There is undoubtedly a huge potential for India in international long-haul flights. Compared to the international carriers, the growth has been around 94 per cent in the last 20 years.

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In a recent interview with The Economic Times, Maillard seemed positive that commercial aviation will boost India’s dominance in the long-haul market. This is a unique segment that has gone underserved for a long time, and there are plenty of untapped opportunities, which can be further enhanced with investments in training, and maintenance.

Akasa is tapping into the latest tech with a US-based reservation systems provider Navitaire. Jet Airways will also begin operations soon by moving its headquarters from Mumbai to Gurugram, and was expected to be in talks with Airbus for a fleet acquisition.

In the following months, competition will heat up dramatically as airlines compete for premier airline services. With rising aviation turbine fuel prices (ATF) and currency barriers for these resources, analysts predict that low margins may be a worry for the sector. Although the two new entrants have not yet revealed their financials, it remains to be seen whether these high flyers can withstand global economic instability.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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