DNA Money Edit: Sky's limit for India's aviation market

Leading airlines such as Air Deccan and Kingfisher Airlines may have slipped into oblivion, but newcomers have ensured that sky is the limit for India's aviation market. Strong passenger growth in the past three years has resulted in domestic air traffic crossing the 100-million mark in 2017.

The surge in air traffic is a direct reflection of the rising economy. The prime driver for the surge has been lower airfares, thanks to lower crude prices and cut-throat competition. It has made air-travel more universal.

The last seven years, during which India grew from 50 million passengers to over 100 million, a number of new airlines – such as IndiGo, SpiceJet, AirAsia and Vistara – have been seen spreading their wings in India. The traffic crossed the 50-million mark in 2010. In 2017, domestic airlines showed a growth of 17.4% and carried over 116.7 million passengers.

While industry-wide load factors went up two percentage points to 86.1 in 2017, airfares remained low. Though the average industry-wide fares for same-day and next-day travel reduced from 9-11% year-on-year, domestic seat capacity grew over 55% since 2015 with daily seats on offer rising to 0.44 million in the summer schedule. Sorting out infrastructure constraints in major airports and establishing better regional connectivity can spur the number of air passengers to a new high.