India crowned world's fastest growing aviation market in 2015 as economy takes off

India was the world’s fastest growing aviation market in 2015, expanding more than 20pc as economic growth on the subcontinent picked up.
The country's air travel industry outpaced the 10pc growth registered in China and 5pc increase in the United States, according to International Air Transport Association.
Strong domestic demand and high manufacturing activity helped India's economy to grow 7.4pc between July and September, overtaking China as the world's fastest growing major country.
That's good news for the local airline industry, which is also enjoying higher profits thanks to a sharp fall in oil prices.
India's economy is boomingIndia’s carriers have lost $10bn in the past seven years as they offered base fares as low as 1 rupee (1p) in a nation where provincial taxes make jet fuel prices the most expensive in Asia.
However, the nation’s oil retailers cut fuel prices, which make up as much as 60pc percent of an Indian airlines’ cost, by 10pc today to the lowest in five years as Brent, the benchmark for half of the world’s crude trading, plunged.
That sents shares in Indian-based airlines higher.
Jet Airways climbed 8.2pc to its highest since January 2011, making it the best performing share on the Bloomberg Intelligence Global Airlines Valuation Peers Index in the past month.
InterGlobe Aviation, the owner of Indian budget airline IndiGo, advanced 8.8pc in Mumbai, while SpiceJet rose 9.4pc.
“A sharp reduction in fuel prices remains a key trigger for margin expansion,” said Rashesh Shah and Devang Bhatt, analysts at ICICI Securities.
“Given improving macro factors like healthy industry passenger traffic growth coupled with lowest fuel rices, we expect Jet to report healthy revenue growth along with better margins."
India is forecast to have almost 30m outbound tourists by 2018, according to IGATE Research.
India and China are among the fastest-growing markets for aircraft manufacturers Airbus and Boeing, which forecast that Asia will overtake the US as the world’s biggest plane market in two decades.
Indian airlines will need 1,740 new planes valued at $240bn over the next 20 years, according to Boeing. That has lured Singapore Airline and AirAsia to start Indian units in recent years.

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