The Aviation Industry in India
The aviation industry in India has come a long way since its inception. From being a small industry catering to the needs of a few, it has now grown into a massive industry with many players and a significant contribution to the Indian economy.
The aviation industry in India has witnessed tremendous growth in recent years and has become a crucial sector for the country's economic development.
The India Aviation Market has soared to impressive heights, solidifying its position as the third-largest domestic aviation market globally. With projections indicating a trajectory that could see it surpassing the UK as the third-largest air passenger market by 2024, the Indian aviation sector is witnessing unprecedented growth and potential.
In 2024, the market size is estimated at a substantial 13.89 billion USD, with forecasts painting an even more promising picture for the future. Expected to expand at a compound annual growth rate (CAGR) of 11.08% between 2024 and 2030, the market is poised to reach a staggering 26.08 billion USD by the end of the forecast period.
The growth of the aviation industry in India can be attributed to the increasing demand for air travel, the rise in the middle-class population, and the growth of the Indian economy.
The passenger traffic in India has been growing rapidly in recent years. The reported figure for FY24 indicates that domestic air passenger traffic stands at approximately 154 million, reflecting a Year-on-Year (YoY) growth rate of about 13%, highlighting the significant expansion within the sector.
The growth in passenger traffic can be attributed to the increasing affordability of air travel, the growth of the middle-class population, and the increasing number of airports in the country.
According to forecasts by Icra, the Indian aviation sector is poised for a robust recovery in the upcoming fiscal year FY25, with domestic passenger traffic anticipated to soar to an impressive 33-34 crore, reaching an impressive 120-124% of pre-pandemic levels.
Similarly, international passenger traffic is projected to surge to 7.7-8 crore in the current financial year, achieving a significant 116-120% of pre-pandemic levels. This optimistic outlook comes on the heels of a remarkable achievement in FY24, where passenger traffic reached an all-time high of 37.6 crores, signalling a complete rebound from the pandemic-induced downturn in both domestic and international segments.
This milestone is particularly striking considering that in FY20, passenger numbers dropped to a multi-year low of 11.5 crore, underscoring the severe impact of the pandemic on the aviation industry. Prior to this record-breaking performance in FY24, the highest passenger traffic at Indian airports was recorded in FY19 at 34.5 crore, indicating the resilience and potential for growth within the sector.
The growth in domestic and international traffic can be attributed to the increasing affordability of air travel and the growing middle-class population.
The Indian government has been actively supporting the growth of the aviation industry in the country. The government has launched several initiatives to promote the aviation industry and to make air travel more affordable and accessible to the general public.
For example, the government has introduced the regional connectivity scheme, which aims to provide air connectivity to remote and underserved regions in the country. The government has also launched the UDAN scheme, which aims to make air travel more affordable and accessible to the general public.
The aviation industry in India has come a long way since its inception and has grown into a massive industry with a significant contribution to the Indian economy. The sector has witnessed tremendous growth in recent years and is expected to continue.
The Indian government has been actively supporting the growth of the aviation industry in the country, and the aviation sector is expected to play a major role in the economic development of India in the coming years.
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