• Aviation Soaring to the skies

    The aviation sector in India has not had it this good in years. Passengers are taking to the skies in droves. At about 8.1 crore tickets, domestic passenger traffic during January to December 2015 was up more than 20 per cent year-on-year.

    The pace has only picked up in 2016 — traffic growth until February this year is more than 23 per cent. India is today the fastest growing major aviation market in the world.

    This stellar growth has been made possible primarily by the deep cut in the cost of aviation turbine fuel (ATF), the largest operating expense for airlines in the country. The rout of crude oil since June 2014 has seen ATF following suit, even if not to the same extent.

    At ?42,157, a kilolitre of ATF in Delhi today is about 40 per cent cheaper compared with two years back and 15 per cent over a year. This has translated into big savings for airlines. For instance, the country’s largest carrier IndiGo Airlines spent about 17 per cent less on fuel in the nine months ended December 2015 compared with the year-ago period, despite increase in its fleet size. As a result, its fuel cost as a percentage of sales fell to 31 per cent from 45 per cent a year ago. 

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