Tag Archives: FICCI

Travel and tourism is expected to provide employment to nearly 53 million people in India, directly and indirectly, by 2029, as per a latest report on inbound tourism commissioned by FICCI and Yes Bank. The sector has been a key source of employment as well, directly accounting for 26.7 million jobs in 2018. Further, the total jobs from indirect and induced activity stood at 42.7 million. The number is estimated to reach 43.7 million in 2019, accounting for 8.1% of the total employment in the country.

The focus on LCC model is expected to only get sharper in the coming years, according to a report on Indian aviation commissioned by FICCI and Deloitte. It is expected that few airlines would even try out the newer Ultra-Low Cost Carrier (ULCC) model that has seen some traction in USA, the biggest domestic market of the world. They could offer absolute stripped-down travel, itemising ticket prices to the services included. Industry experts are even talking about Hybrid and Low-Cost Long-Haul (LCLH) business models. With lower cost of operations due to the waiving off of most airport charges on RCS (Regional Connectivity Scheme) routes, the ULCC model may be the newest paradigm for the industry in India. This would indeed help make air travel more affordable to the country’s millions.

Over the next two decades, the global commercial aircraft fleet size is expected to grow at a CAGR of around 4 per cent. Around 45,000 new aircraft are likely to be delivered globally between 2018 and 2040, suggests a report ‘Vision 2040 for the civil aviation industry in India’ by FICCI and KPMG. The growth will be driven by socioeconomic changes in emerging economies, especially in India, China, South East Asia and the Middle East. These factors include rising incomes and aspirations, lower oil prices, fierce competition between airlines and increasing value of ‘time’. For India, Boeing raised its long-term forecast for commercial airplanes to 2,300 new jets – valued at $320 billion – over the next 20 years. Nearly 84 per cent of those are expected to be narrow bodies. According to Boeing, with more than 5 per cent of the world’s fleet expected to operate in India by 2037, commercial services like flight training, engineering and maintenance and digital analytics etc., will be the key drivers of growth. In the South Asian market, including India, Boeing forecasts a commercial services market valued at USD 430 billion over the next 20 years.

The total passenger traffic (to, from and within India) in India is expected to rise nearly six-fold from 187 million in FY2018 to around 1124 million in FY2040, according to a latest report by FICCI-KPMG titled ‘Vision 2040 for the Civil Aviation Industry in India’. This includes around 821 million domestic passengers and around 303 million international passengers (to and from India). The overall CAGR across the five clusters works out to around 9% in domestic and 7% in international traffic during FY 2018-2040. “The FICCI-KPMG projection is higher than the projections made by leading organisations. Given the untapped potential of the Indian aviation market and the signi?cant reforms being driven by the federal and state governments, we feel that the above projections are eminently achievable. These are of course predicated on the assumption that volatility in oil prices and exchange rate will be within a reasonable range and the constraints in terms of policies, taxation, infrastructure and ease of doing business shall be addressed on priority,” the report states.

The first edition of Global Aviation Summit 2019 witnessed participation from more than 80 countries. Being organised from January 15-16, 2019 at Grand Hyatt Mumbai, the summit themed on ‘Flying for All’ is touted to be the first-of-its-kind that will cover a diverse range of topics – from domestic aviation market, drone policies, infrastructure investment, freight and cargo policies, aviation financing and much more. It has attendance from more than 100 global CEOs, 35 exhibitors and more than 1200 delegate participation. The inaugural session saw keynote speeches by Sandip Somany, President, FICCI; R N Choubey, Secretary, Ministry of Civil Aviation; Dr. Olumuyiwa Benard Aliu, President of the Council, International Civil Aviation Organization; Suresh Prabhu, Minister of Civil Aviation and Commerce & Industry; Devendra Fadnavis, Chief Minister of Maharashtra; and Jayant Sinha, Minister of State for Civil Aviation.

Bangladesh alone constituted about 45 per cent of total foreign tourist arrivals (FTAs) to India on medical visa in 2017, according to a FICCI study on ‘India: Innovating Transforming and Defining Medical Value Travel’. Bangladesh holds the eighth place among largest population countries in the world. The major destination countries include India, China, Singapore, Thailand, South Korea, Malaysia, Saudi Arabia, the USA, the UK, Australia, Japan and Germany for treatments including cardiology, oncology, neurology and orthopaedic. Majority of deaths in Bangladesh are due to non-communicable diseases out of which cancer has a share of 10 per cent. However, the existing infrastructure caters to approximately 10 per cent of cancer patients with 16 cancer treatment centres in Bangladesh. High costs, poor services, long waiting lists, lack of technology in Bangladesh are the major reasons for medical value travel from Bangladesh.

In a recent forecast by Boeing, Indian airlines are expected to order as many as 2,100 planes worth US$290 billion over the next 20 years. As per a study by FICCI-Yes Bank report titled ‘Opportunities and Financing Outlook for Aviation Sector’, this increase is led by strong passenger demand, low fuel prices, high load factor, strong local currency and strong economic growth. Indian carriers operated 496 aircraft in FY17 up from 381 in FY08. At the end of FY17, Indian airlines had ordered more than 800 planes. Boeing projects a worldwide demand for 41,030 new airplanes over the next 20 years, with India carriers needing more than 5.1 percent of the total global demand.

Globally, medical tourism market is estimated to touch a market value of USD 40 bn by 2020 and Indian medical tourism industry is expected to touch USD 09 billion by 2020, according to FICCI-Yes Bank Knowledge Paper titled ‘Tourism Infrastructure Investments: Leveraging Partnerships for Exponential Growth’. India is fast developing into a medical and wellness tourism hub of Asia owing to its superior quality healthcare services offered at affordable prices coupled with a dedicated policy framework of government to promote medical tourism. Rising disposable incomes, self-awareness on personal well being and increased air connectivity has encouraged market for wellness services, tourists seeking specialised medical treatments, mainly Ayurvedic, spa and other therapies look forward to India as preferred destination.

The Indian hotel market is projected to grow to around USD 13 bn by 2020, according to FICCI-Yes Bank Knowledge Paper titled ‘Tourism Infrastructure Investments: Leveraging Partnerships for Exponential Growth’. Further, as per World Travel & Tourism Council’s 2018 report, the industry contribution to capital investment in India was Rs 2706.1 bn in 2017 and is projected to grow 6.7 per cent per annum in next 10 years to Rs 5546.3 bn by 2028, higher than the global average of 4.5 per cent. Despite increase in private sector investment, the Indian hotel industry observed a decline in average room rate and room occupancy in 2016-17 which is largely attributed to lower participation of hotels in the five-star deluxe and five-star categories in India.

In a bid to attract investors across the industry, a number of state tourism boards presented their ideas and prospect on tourism in their respective states during the 4th Tourism Investors Meet held at FICCI, Federation House, New Delhi. The tourism boards of West Bengal, Rajasthan, Gujarat and Manipur gave detailed presentations on how their state provides lucrative opportunities to investors. Each presentation counted on their USP and explained about the incentives and concessions provided by the respective state governments. The first presentation was given by the meet’s Theme State West Bengal Tourism which stressed on developing the state as an ‘ecotourism hub’. This was followed by a presentation by Partner State Rajasthan Tourism which focused on promoting heritage location and properties in the state. It also talked about opportunity of growth for adventure sports and MiCE in the state. Feature State Gujarat Tourism stressed on providing attractive incentives to investors with last mile connectivity for travellers in the state. The final presentation was given by Feature State Manipur Tourism. Highlighting the state’s rich culture and resources, the presentation talked about the prospect of developing Manipur as a ‘tourism hub’. The main focus was on Loktak lake, the largest fresh water lake in the Northeast.