Head of Marketing for Airbus Asia Joost Van der Heijden (right) and Srinivasan Dwarakanath, CEO of Airbus India, pose with a model of an Airbus A380 at the airshow in Hyderabad yesterday.
NEW DELHI: India’s fast-growing civil aviation sector, already among the top 10 globally, could be number one worldwide by 2030, said a report by global consultancy KPMG.
Even though most Indian airlines face hefty losses this year and huge debts in the face of fierce competition and a sharply slowing economy, in the longer term the $16bn sector is on a high-growth track thanks to large untapped potential, experts say.
“We’ve just touched the tip of the aviation iceberg,” said Amber Dubey, KPMG’s India aerospace head said, noting “access to aviation is still a dream for nearly 99.5 percent” of India’s 1.2 billion population. The report was released to coincide with a five-day air show in Hyderabad which winds up this weekend.
Chicago-based Boeing separately, in a similarly bullish mode, projected demand for over 1,600 new airplanes in India over the next 20 years, valued at $205bn.
“India’s demographics are highly favourable to growth of air transportation” while “the share of India’s large population entering the workforce is growing,” said Dinesh Keskar, a Boeing senior vice president.
Low-cost carriers, foreign investment in domestic airlines, modern airlines and a new drive for regional connectivity are propelling a new expansion wave, the KPMG report said. Many states, especially in eastern India, have begun promoting air connectivity including by lowering aviation fuel sales tax and developing no-frills airports, the report noted.
But a lot more needs to be done, such as allowing domestic code-sharing and developing infrastructure, said the report prepared with the Federation of Indian Chambers of Commerce and Industry (FICCI).