India has one of the most rapidly growing Aviation sectors in the world, growing faster than even the US and China. This is due in part to India’s growing population and middle class, with around 50 million people able to fly. Passenger trips on India’s planes have doubled in the last four years, and in two decades India is predicted to be the second largest Aviation market in the world with over a billion flights a year.
One of the reasons that Indian airlines are thriving is the focus on exploiting the rise in passengers. Growth is always at the forefront of every decision, and this translates to profits. An accurate way of tracking growth is by the revenue per available seat kilometre — the number of seats available multiplied by the number of kilometres flown.
However, some airlines in India are suffering under the pressure of achieving perpetual growth. Jet Airways, India’s second largest airline, has suffered losses despite predicted growth, blaming problems on rising fuel costs.
One trend in Indian Aviation involves airlines placing a priority on the number of flights they operate a day. The extreme number of flights have led to strains on flight control, resulting in near misses. Around a third of flights to and from Mumbai were delayed last year.
The market is growing so fast that many airlines are struggling to build the infrastructure and train pilots fast enough to meet demand. It is predicted that by 2036, 5% of the total global demand for new aircraft is going to come from Indian airlines, worth billions of dollars. New Delhi alone is planning to build 50 airports and helipads in the next five years. There is a worldwide shortage of pilots, which has lead to some airlines attempting to bring in single pilot planes.
The Aviation industry has seen a trend over the last few years to offer flights as cheaply as possible. This draws in more customers and can make the airline more money in the long run. However, relentless cost-cutting can have a ripple effect on other areas of business, leaving fewer funds available for maintenance or less of a focus on customer experience.
Focus on the lowest ticket price can also result in a price war with other airlines, forcing some to offer fares so low they can’t cover their basic operating costs. This is seen in that despite many Indian airlines filling over 90% of their seats, many are also still losing money. The ICRA estimates that total losses sustained by India’s Aviation market will be around £430 million.
It’s clear that the aviation industry at large can learn many lessons from India, including ways to maximise growth, improve efficiency and raise the overall quality of flights and customer experience.
Read more about how the Aviation market is predicted to grow over the next decade, or learn about upcoming trends in the Aviation industry.
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