Displaying items by tag: Macros

Saturday, 02 September 2017 15:42

Civil Aviation


  • India’s civil aviation industry is seeing high-growth, passanger traffic witnessing a growth of 17.62 per cent over the previous year.
  • India can become the third largest aviation market by 2020 and the largest by 2030.
  • India was world’s fastest growing domestic travel market for the 22nd time in a row, recording a 26.6 per cent year-on-year growth in January 2017, according to the IATA.
  • India replaced Japan to become the third largest domestic aviation market globally, recording a total of 100 million domestic flyers in 2016, according to Centre for Asia Pacific Aviation (CAPA).
  • According to CAPA, domestic air traffic is expected to grow 25 per cent and cross 130 million in financial year 2017-18.

Growth Factors

  • Increasing disposable incomes
  • Fall in prices of Aircraft Turbine Fuel (ATF)
  • Industry-friendly government policies
  • Foreign Direct Investment (FDI) in domestic airlines
  • Increase in tourism
  • Visa reforms
  • Low-cost carriers (LCCs)
  • Improving airports infrastructure
  • Advanced information technology (IT)
  • Growing emphasis on regional connectivity
  • Positive macro-economic factors

Major investments in aviation:

  • Rolls-Royce Holdings Plc, has opened a new defence service delivery centre (SDC) to support over 750 aircraft engines used by the Indian Air Force, Indian Navy and Hindustan Aeronautics Ltd.
  • Qatar Airways to start India’s first fully owned foreign airline
  • Indigo and GoAir, plan to expand their network to Gulf cities
  • GVK Power & Infrastructure Ltd., has won the right to build Mumbai’s second airport in Navi Mumbai, which will require an investment of Rs 16,000 crore
  • IndiGo, has entered into a partnership with global distribution system services operator Travelport, to expand its global presence across 180 countries.
  • Several European countries like Greece, Netherlands, Georgia and Sweden, have shown interest in signing an open sky agreement with India which will enhance the country's international connectivity.
  • India has signed Open Skies Agreement to encourage connectivity and passenger travel between India and Jamaica, Guyana, Czech Republic, Finland, Spain and Sri Lanka

Government Initiatives

  • In the Budget 2017-18, allocation for Aviation Ministry was substantially increased by over 22 per centfor the next financial year.
  • Indian airline companies have been awarded with the right to fly to 128 routes across India
  • Government approved construction of 18 Greenfield airports
  • The Cabinet Committee on Economic Affairs has approved to revive 50 un-served and under-served airstrips in three financial years starting from 2017-18
  • Government has started a new regional connectivity scheme (RCS) called Ude Desh ka Aam Nagrik (UDAN) under which fares will be capped at Rs 2,500 for half the seats in an one-hour flight
  • Government plans to double the number of airports over the next two to three years
  • The Ministry of Civil Aviation along with Airports Authority of India (AAI) plans to develop small airports with frugal facilities, and encourage private airlines to bid for routes connecting these small airports with existing larger airports

Growth factors in graphs 



Published in Macros

We will call you back


Newsletter Subscription

Get FREE subscription to our investment insights.