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India’s aviation market

Published Apr 17, 2017 06:59am

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INDIA has become the third largest aviation market in terms of domestic passenger traffic, beating Japan, an industry report has said.

India’s domestic air passenger traffic stood at 100m in 2016 and was behind only the US (719m) and China (436m), Sydney-based aviation think-tank Centre for Asia Pacific Aviation (Capa) said in its latest report.

India acquired the third spot globally by unseating Japan, which flew 97m domestic passengers in 2016, the Statesman has reported quoting PTI.

Domestic air traffic has shown a consistent growth of 20-25pc throughout 2015 and 2016, peaking in January this year at 25.13pc.

However, the domestic travel demand rose 16pc in February this year, ending the long streak of over 20pc.

According to Capa, India which enjoyed the fourth position in terms of overall air passenger traffic (both domestic and international) along with the UK, has also inched closer to becoming the third largest one by March next year.

“India will become the third largest market 2-3 years ahead of what was projected. This is because the growth has been much higher,” Kapil Kaul, head of CAPA India, said.


India acquired the third spot globally by exceeding Japan in domestic air passenger traffic


Japan, which flew 141m passengers in 2016, was ahead of India whose total air passenger traffic was 131m in the previous year, as per Capa.

The US with 815m passengers in 2016 enjoyed the top position, followed by China with 490m, according to the report.

“While we will reach the third spot for both domestic and international air travel ahead of the projected period, we will remain at that position for a very long time because it will not be easy to surpass China and the US,” Kaul said.

An aviation market is defined by traffic to, from and within the country.

India to grow faster than China

THE Asian Development Bank’s latest global projections has put India’s economic growth a few notches above China’s with the former poised to register a gross domestic product (GDP) of 7.4pc in 2016-17 and 7.6pc for FY2017-2018. 

The Asia Development Outlook (ADO) 2017 report released here today, however, said the impact of demonetisation in the wake of Prime Minister Narendra Modi’s note ban initiative last year had only a ‘temporary’ ‘effect’ on the India’s economic growth. 

“…ADB notes that the deceleration to 7.1pc registered last year was due in part to slower investment growth. Also contributing to the moderation was the impact of the government’s demonetisation of high-value currency notes, though this effect is seen as largely temporary,” an ADB press note stated. 

ADB’s Chief Economist Yasuyuki Sawada attributed the recovery in growth rate to an ‘array of important economic reforms’ which he said has propelled India’s economic success in recent years. “A continued commitment to reform ~ especially in the banking sector ~ will help India maintain its status as the world’s fastest growing major economy,” Sawada observed. 

The ADB report said the Indian economy riding high on improved agriculture output, foreign direct investment flow and strong domestic demand factors will continue to help India retain its tag as the fastest growing economy of the world. It, however, struck of a note of caution over the likely impact of rising prices of crude in the international market on inflationary trends. 

“The ADO expects growth to accelerate through increased consumption, as more new bank notes are put in circulation, and as planned salary and pension hike for state employees are implemented. The public sector will remain the main driver of investment... Exports are forecast to grow by 6pc the coming year. Inflation is projected to accelerate to 5.2pc in FY2017 and 5.4pc in FY2018 as the global economy recovers and commodity prices rebound. 

“The assessment notes risks from higher oil prices as India imports nearly 80pc of its fossil fuel needs. A rapid increase in the price of oil could undermine the country’s fiscal position, stoke inflation, and swell the current account deficit. The report estimates that a $1 increase in oil prices raises the import bill by nearly $2bn,” according to the ADB’s flagship economic publication here. 

About China the ADB’s report maintained that the country’s overall output is expected to slow down to 6.5pc in 2017 and 6.2pc in 2018, down from the 2016 figure of 6.7pc. 

The Statesman/ANN

Published in Dawn, Economic & Business, April 17th, 2017

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Comments (2) Closed



Sandy Apr 17, 2017 10:33am

India is developing with a phenomenal growth....

azadi dil ki Apr 18, 2017 06:22am

With the implementation of GST, India can easily rise gdp above 10%. India emerging in every field is a good news. But still long way to go.