-
Indian Airlines Soar But Experts Warn of Turbulence Ahead
A major acquisition by Indian budget airline SpiceJet this week underscored the vast potential of the world’s fastest-growing aviation market, but experts say woefully inadequate infrastructure and high operating costs could threaten the industry’s rapid expansion.
Share This
India’s burgeoning middle classes are taking to the skies in ever greater numbers, with passenger growth of 20 percent in 2015 according to industry body IATA — nearly double China’s 11-percent increase over the same period.
Low-cost airlines are rushing to expand their fleets to take advantage of that growth, encouraged by a fall in fuel prices that last year pushed several private operators into profit for the first time.
SpiceJet, India’s fourth biggest airline with a 13-percent market share, said Friday it was buying up to 205 Boeing planes worth $22 billion to fuel a major expansion of its domestic operations.
Experts say the country’s aviation sector holds vast untapped potential, with just 100 million of India’s 1.2 billion people taking to the skies last year.
But they warn that India’s rickety infrastructure could hold back future growth, with just 90 of the country’s more than 460 airports currently operational.
“Consistent 20-percent-plus growth per se is not a cause for celebration if the institutional framework is weak,” said Kapil Kaul, South Asia head of industry advisory and research firm CAPA.
“This only increases safety and security risks. And skill shortages are also emerging. An urgent fix is required.”
CAPA has warned that India could face a capacity crisis unless it builds 50 new airports over the next decade. Andreas Athanasiou Authentic Jersey
