Indian aviation is under-penetrated compared to China and near peers like Indonesia, as per a report by industry body Assocham, which said that Indian carriers need to increase product quality to compete with international carriers like Singapore Airlines and Emirates which have high standards of service.
The report on ‘Civil Aviation: The Roadmap for Robust Growth Over Next Decade’ observed that this is largely a function of relatively lower income levels compared to China and Indonesia. However, the Indian market harbors immense potential, considering rising income levels and its vast population, it said.
It said that the Chinese aviation market grew four times between 2007 and 2022 as income levels rose and the Indian market is poised for similarly impressive growth.
While 65 million Indians traveled overseas in FY 20, the majority of traffic leaked to foreign carriers, it said. The report said that tourism boards in countries like the UAE, Turkey, and Australia promote tourist destinations along with the carriers and airports, but this is not the case in India. Similarly, promotions on Medical and Education tourism could be undertaken jointly, it said.
Suggesting policy intervention, the report said that the Ministry of Tourism can jointly promote Indian tourist destinations and Indian carriers serving them and the Ministry could also spearhead efforts in involving various medical and educational associations.
Indian carriers need to increase product quality to compete with international carriers like Singapore Airlines and Emirates which have high standards of service. Airports and airlines need to work together to improve various aspects of a passenger’s product experience, it said.
While aviation fuel (ATF) prices are currently fixed by the Oil Marketing Companies (OMCs) and are not governed by an independent regulator, the report suggested the creation of an independent regulator to make ATF price determination more transparent.
It said that no regional carriers have been able to sustain and the ecosystem needs to be looked at from the point of view of supporting these carriers. Currently, airlines are required to obtain night parking permissions in order to obtain permission to import aircraft. The report said that such requirements should be removed, and airlines should be allowed to import aircraft and place them at airports in India that are able and willing to support additional operations.
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