India’s growth will be low-cost fare driven, at present contributing over 70 per cent of the passenger traffic

At a recent seminar on “India: An Emerging Aviation Hub” in New Delhi, figures were bandied about how India was at the threshold of an aviation boom that would be spurred by Tier II and III cities. In simple terms, this translates into infrastructure development at smaller airports and increased movement of passengers/cargo between destinations beyond the major trunk routes, to touch 100 million passengers by 2020.

India’s growth will be low-cost fare driven, at present contributing over 70 per cent of the passenger traffic. In 2009, of the 44 million passengers on domestic routes about 27 million passengers (over 60 per cent) were on the low-to-medium density markets (Tier II and III destinations), thus throwing open enormous business opportunities for regional jets. About 17 million passengers were from 24 city pairs across seven major metro cities (Tier I).

The Centre for Asia Pacific Aviation predicts that domestic traffic will grow at 25 per cent to 30 per cent a year until 2010 and international traffic will grow by 15 per cent. Keeping pace with passenger growth, Indian carriers have 480 aircraft on order for delivery by 2012, which compares with a fleet size of 310 aircraft operating in the country today. And if we go by the prophecy of the Minister of Civil Aviation, Praful Patel, India will require about 5,000 aircraft if 10 per cent of the population begins to fly. At present, the number of air travellers is less than 2 per cent of the population. The penetration of civil aviation in India is among the lowest, with the country having a ratio of 2.89 million passengers per aircraft compared with 0.05 million in the US.

There indeed is potential and a growing appetite from airline operators in India to connect routes previously considered unviable. This transformation has come about as regional jets have positioned the economic viability of operating jets with capacities ranging from 70 to 150. There is a growing mix of aircraft capacities as airlines discover that there are over 200 routes having low-tomedium density traffic which need to be tapped. Operating narrow-body aircraft on lowto-medium density routes have largely been unviable, leading to closure of some destinations. As per Ministry of Civil Aviation, there are 62 regional aircraft with scheduled operators and this number could go up as and when the new players take off.

The ones who got permission to start operations include Star Aviation, Zav Airways, King Airways, and Premier Airways. Though Chennai-based Star Aviation was expected to start operations this year, it has been stalled. Star Aviation was planning to start with 3 Embraer 72-seater aircraft and have a 10-aircraft fleet, all to connect secondary cities. So also a Surat-based full-service carrier, Luan Airways, is expected to go operational soon. Meanwhile, Gurgaon-based MDLR Airlines that halted its operations last year is planning to make a comeback. The regional carrier has sought approval of Directorate General of Civil Aviation (DGCA) to import two BAE Avro RJs to restart regional services in northern states.