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Rediff.com  » Business » Aviation biz heading towards stability: Experts

Aviation biz heading towards stability: Experts

Last updated on: September 22, 2009 16:41 IST

A Jet Airways flightThe slowdown-hit domestic aviation industry is witnessing some stability in passenger traffic, though it would take some more time for the overall recovery, aviation experts and organisations feel.

The latest official figures have shown a marginal improvement in air traffic with domestic carriers flying 36.3 lakh (3.63 million) passengers in August compared with 35.97 lakh (3.59 million) in the month before.

In the three weeks of September, there has been a 14-15 per cent rise in passenger traffic compared with that in last September, Ankur Bhatia, Executive Director of the Bird Group, which provides a large number of aviation related services to major airlines, MROs and related companies globally, told PTI.

Noting that improvement in air travel during the festival season was an annual feature, he said the upward trend in passenger traffic was likely to continue beyond this season unless retarded by any economic, political or security crises.

The current upward trend would lead to recovery by the end of the current financial year if no external factor contributed to its stalling, he added.

Bhatia also estimated that though the domestic air traffic had dipped from the 2007 levels last year, it would remain at the 2008 level this calender year too.

To questions on the rising prices of aviation turbine fuel, the Bird Group ED said the prices were likely to stabilise at rates below $100 per barrel, thus keeping airline costs under check.

Oil prices have been the single largest component of rising costs and losses for the airlines.

The cash-strapped airlines in India jointly account for about one-third of the global losses, amounting to an estimated $3.6 billion, according to the International Air Transport Association.

To questions on the losses of the Indian carriers, Bhatia pointed out that an increase in air traffic did not necessarily imply a hike in the yields as the Indian airlines were suffering massive losses which were difficult to surmount at this stage.

According to aircraft manufacturer Airbus, global air passenger traffic was set to increase by over 150 per cent over the next 20 years, representing an annual growth of 4.7 per cent and India and China would be among the emerging markets for aircraft, accounting for as much as 31 per cent of the total.

The two Asian nations would be followed by 25 per cent in Europe and 23 per cent in North America, it said.

The latest Global Market Forecast of Airbus said that in terms of domestic passenger markets, India with 10 per cent and China with 7.9 per cent would have the fastest growth over the next 20 years.

The fastest growing regions would be India, China and Africa, driven by deregulation, economic growth, population growth and inter-regional trade, the report said.

On similar lines, the Centre for Asia Pacific Aviation has pointed out that despite the rapid expansion in recent years, India has only just scratched the surface of the potential for the aviation sector and traffic was bound to grow in the coming months.

On the existing potential, the CAPA said in a recent report that the per capita air trips remain low even by the standards of other developing countries.

While China's domestic market is more than four times the size of India's 40 million passengers. Australia, a country with a population of just 21 million, compared with India's 1.1 billion, has a market 25 per cent larger.

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