Analysts have pointed out that airlines are in for a profit of $300 million in the fiscal year to March 2011, getting out of the red after two successive years of losses (combined losses of $2 billion). The capacity growth for the next financial year has been pegged between 12 and 13 per cent.

India recently made commercial aviation history. IndiGo, India’s largest low-cost carrier (LCC) had just signed an memorandum of understanding (MoU) for 180 eco-efficient Airbus A320 aircraft of which 150 will be A320neo and 30 will be A320, a deal worth $15.6 billion (Rs. 71,000 crore). It is the largest single firm order for large jets in commercial aviation history, and also makes IndiGo a launch customer for the A320neo.

“This order positions IndiGo to take full advantage of the predicted growth in Indian air travel,” said John Leahy, Chief Operating Officer, Customers, Airbus. Indian air travel is a massive growth momentum, having recorded over 50 million domestic passengers in 2010. The Ministry of Civil Aviation has envisaged 280 million passengers by 2020, a phenomenal addition of 230 million passengers in a decade. The GDP growth rate is over 8.5 per cent and air traffic is set to grow nearly two times the GDP growth.

Not just Airbus, almost all the major commercial aircraft manufacturers are working hard to get their hands on the large aviation pie that exists in India. Airline traffic growth has been in double-digit and in 2010, airlines in India carried over 500 lakh passengers as against more than 400 lakhs in 2009, thereby registering a growth of nearly 19 per cent led by the LCCs which accounted for over 70 per cent of air traffic. The LCCs are going to be the drivers, connecting Tier-II and III cities as airport infrastructure is slowly coming in place.