Indian aviation market has huge potential waiting to be tapped: Top industry experts

India's aviation market has a "huge potential" waiting to be tapped, and a growing middle-class and a young population usually showing a greater propensity to travel will contribute to its growth, top experts of the industry have said.

Besides, privatisation of airports has been a "big boost for aviation", and huge investment is happening in new airports and existing airports in India, said Nipun Aggarwal, Chief Commercial & Transformation Officer, Air India.

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Aggarwal of Air India, CEO of IndiGo, Pieter Elbers; CEO of SriLankan Airlines, Richard Nuttall and Country Director for the International Air Transport Association (IATA) in India Amitabh Khosla, were among leaders of the aviation industry who took part in Indian Travel Congress 2023 hosted recently in Colombo, as part of the efforts to boost tourism in the cash-strapped island nation.

The industry experts concurred that the growth in the aviation sector will in turn fuel the growth in the tourism sector, both of which were badly hit globally after the outbreak of the Covid-19 pandemic, but have shown resilience, and are recovering on the right trajectory.

"In so far as aviation is concerned, we are extremely bullish on the long-term prospects of the industry. Indian aviation is the third-largest and fastest-growing market in the world, growing at almost 10 per cent for the last decade, almost 2.5 times the global average," Aggarwal said.

He was speaking in a panel discussion on 'India Tourism Vision 2047: A Transformed Landscape of Experiences and Connections', held as part of the 67th annual convention of the TAAI (Travel Agents Association of India) -- Indian Travel Congress -- in the Sri Lankan capital from July 6-9.

"Aviation is very closely related to GDP (Gross Domestic Product) and GDP per capita... We have a growing middle class, a rapidly urbanising population, and we have a very young population. We are a billion-plus population," he said.

The top official of Air India underlined that India is the third largest aviation market, but "our market size is a fraction of the US or China market, so the potential out there is huge".

He said air travel penetration in India is still "very, very low", with only "0.1 trips per capita compared to 0.5 trips per capita in China", adding, that the Indian government has taken multiple steps over the last decade or so, to facilitate aviation. Also, the way aviation infrastructure is coming up in India is quite commendable, and this is driving supply and driving demand, Aggarwal added.

"In times to come, we feel that aviation will grow 5-6 times from where we are. In 2019 we had almost 200 million passengers, and in the next couple of decades, we can easily cross a billion plus. That's not a very difficult target," he said.

There are "massive opportunities" in the vibrant Indian aviation market, the IATA's Director General Willie Walsh had said on the sidelines of the IATA Annual General Meeting (AGM) in Istanbul in June.

The disposable income of middle and high-income households is rising much faster than the national average. India is going to have one of the largest young populations in the world, which usually has a greater propensity to travel, India's Ministry of Civil Aviation said in a statement in March this year.

Aggarwal said in Colombo that in terms of the overall market size, aviation has three segments, domestic, short-haul and long-haul, and "we have been primarily operating in domestic and short-haul, as a country".

"We are not even scratching the surface when it comes to market share on long-haul. Out of 200 million people flying in and out of India, 20 million are long-haul... So, there is a huge potential out there waiting to be tapped," he added.

With the privatisation of Air India, now it has "enabled the Indian aviation" to tap a very, very large segment of the market that had hitherto "remained untapped", the senior official of Air India said.

Union Minister of Civil Aviation Jyotiraditya Scindia, in his address at an aviation summit in Delhi in March, had underlined the scope of exponential growth and said that India is the third-largest domestic market in the world in terms of seat capacity, but in terms of international seat capacity, we are still ranked at the 18th position. Therefore, the prospect for long-term consistent growth in the market seems very strong, the ministry had said.

IndiGo's CEO Elbers asserted that there is "enormous potential" in building traffic in the region, and mentioned its new flights that are set to begin operations soon from India (Mumbai) to Jakarta, Indonesia and Nairobi, Kenya.

"Let's work together to ensure that Indian aviation grows as we move into the future," he said in his address during a session held as part of the TAAI convention.

The top boss of IndiGo recalled the recent historic order of 500 aircraft made by the no-frills airline that started flying more than 16 years ago. The budget carrier in June had placed a firm order for 500 narrow-body planes with Airbus. This is the largest ever single aircraft order placed by any airline with Airbus.

Currently, IndiGo operates more than 300 aircraft and has plans to double its fleet by the end of this decade.

In another panel discussion on 'Sky is not the Limit' held as part of the TAAI convention, Country Director for the IATA in India, Khosla, said, "In the long-term passenger forecast for IATA, we see, India, in this decade... will be the third largest global aviation market, which is a significant milestone. Needs to be repeated over and over again, because that is where we are headed".

If one sees the top 10 charts of how countries fare in terms of travel market size, six of them are in Asia, and it's also growth for the entire region, he said.

In the story of growth, "we don't see any roadblock, even though there are short-term blockers of infrastructure and supply, or supply chain not able to cope up. Workforce leaving the industry during pandemic years, supply chain issues. Regardless of that, we are seeing India on a growth trajectory," Khosla said.

SriLankan Airlines CEO, Nuttall said, the opportunities for Sri Lanka in the aviation sector are "massive".

"We are trying to get back to where we were in pre-Covid time, in the next 12-18 months. We are building a new terminal, the current airport is already constrained. Work on the new terminal that had stopped last year has now restarted. Hopefully, in the next couple of years, we will have a new terminal, double the size of what we have today," he said.