India’s air passenger volumes to reach 310 million by 2018

The overall air passenger volumes (pax) have been consistently increasing and are likely to reach 310 million by FYE18, says India Ratings and Research (Ind-Ra). This will be driven by the aspirations of the middle class to travel in flights and a reduction in price differential between air travel and rail journey, including the recently increased cancellation fees for train tickets. The slowdown in economic growth during the first half of the current decade had minimal impact on pax growth. However, the 2008 global economic crisis and fuel and currency crises in FY13 had a pronounced impact on air traffic growth. The gradual increase in private final consumption expenditure has been buttressing India’s pax growth since early FY14. Ind-Ra’s sensitivity on economic growth also underlines the strong underlying fundamentals and continued growth in pax volumes. Ind-Ra’s also reports that large gateways such as Mumbai and Delhi airports and mid-market airport hubs such as Bengaluru and Hyderabad airports have displayed strong volume resilience, despite unfavourable macroeconomic trends.