India is the world’s third-largest civil aviation market, contributing more than 5 percent to India’s GDP, and it is growing fast. Its market size is expected to grow by 2.5 times the current level by FY30, growing at a compounded annual rate of more than 14 percent.

As per the latest data available with the International Air Transport Association, or IATA, as of March this year, India was the third largest domestic air passenger market. The USA was at the top spot with close to 20 percent revenue passenger kilometres share and 83 percent passenger load factor or PLF.

Speaking to CNBC-TV18, Vinay Dube, CEO, Akasa Air, emphasised the importance of a competitive cost structure as one of the fundamental pillars of Akasa's success.

Despite concerns about supply constraints, Dube expressed confidence in Akasa's ability to maintain a healthy equilibrium between demand and supply. He attributed this optimism to the government's significant investments in airport infrastructure. The expansion of airports from 70 to 140, with plans to reach 200, including key locations with existing constraints, bodes well for the growth and development of Akasa.

Read Here | Several passengers injured after Delhi-Sydney Air India flight suffers mid-air turbulence

In terms of fleet expansion, Dube revealed that Akasa is set to welcome its next aircraft within the next 60 days, pushing the total fleet count beyond the 20-aircraft milestone. This achievement will position the airline to commence international flights by the end of the year. The pace of growth remains impressive, with plans to have 72 aircraft delivered by the end of the first calendar quarter of 2027.

Furthermore, Dube mentioned that a larger aircraft order is in the pipeline this year.

The aviation industry was one of the hardest hit by the pandemic, but overall, air travel demand is nearing pre-COVID levels. India is forecast to see domestic air passenger traffic rise to 160 million this fiscal and more than double to 350 million by FY30. The international traffic in India is similarly expected to more than double by FY30

The market is very much dominated by Indigo Airlines, which has a share of almost 57 percent of the entire air passenger market in India. Air India Group, including Vistara, etc, is the second largest player with more than 25 percent share, and then you have the rest. Go First had a share of less than 7 percent in domestic traffic, and it has now halted ops and filed for bankruptcy. And that could mean some market consolidation, other airlines benefitting in terms of demand and even better pricing in the short term.

Watch accompanying video for more

Also Read | IndiGo expands international capacity, inducts second wet-leased Boeing 777

First Published:May 17, 2023 5:13 PM IST