Escolar Documentos
Profissional Documentos
Cultura Documentos
Euromonitor International
September 2017
AIRLINES IN INDIA Passport I
© Euromonitor International
AIRLINES IN INDIA Passport 1
AIRLINES IN INDIA
HEADLINES
Retail current value sales grow by 16% in 2017 to reach INR1.8 trillion
Airlines focus on connectivity for second- and third-tier cities
An 8% retail value CAGR at constant 2017 prices is expected over the forecast period
TRENDS
Airlines continued to see strong retail current value sales growth in 2017. Growth was driven
by increased connectivity between cities, especially between second- and third-tier cities and
metropolitans. The government, along with the Civil Aviation Authority, is reviving old/unused
airport strips in an effort to make them operational again. Meanwhile, the focus of the Airports
Authority of India (AAI - under the Ministry of Civil Aviation) is to increase connectivity by
creating new airports across the country.
The competitive environment continued to be dominated by domestic players, both in
scheduled and low cost carriers. Air India, the national flag carrier, accounted for a 14% share
of retail value sales in 2017, followed by InterGlobe Enterprises (13%). The competition was
intense amongst low cost carriers, which were primarily more active in domestic travel.
In 2017, companies focused on quality and price. Furthermore, with the Goods and Services
Tax (GST) coming into effect in July 2017, economy class is set to become more affordable
due to a fixed tax rate of 5%, compared with 6% prior to GST. This will help to stimulate the
development and growth of domestic players, as consumers are likely to continue to focus on
the quality and punctuality of airlines over price.
Air India has strong scheduled operations on both international and domestic routes.
Furthermore, the national flag carrier added new international destinations in 2017, with Delhi-
Copenhagen expected to be the first of many in May.
Go Airlines (India) registered the strongest retail value sales growth in 2017, as more
travellers opted to fly with GoAir during the year. Go Airlines offered a quality low cost carrier
with more affordable prices than competitors, which made it very popular amongst middle-
income consumers.
Online value sales rose by 15% in retail current value sales in 2017. The strong growth in
online sales was driven by air intermediaries like MakeMyTrip, Yatra.com and Cleartrip.com,
among many others. Online intermediaries benefited from the offer of a combination of
competitive prices and multiple choice options when booking flights.
Scheduled continued to be preferred for business purposes and by the affluent consumer
base. While generally offering higher prices, scheduled airlines are perceived to provide better
quality in terms of food and other in-flight services. Furthermore, scheduled flights were the
only ones to include food in the ticket price. Low cost carriers, on the other hand, were
preferred by middle-income consumers, whose primary consideration was the price and
duration of the flight rather than the quality of the service.
PROSPECTS
Airlines is projected to see an 8% retail value CAGR at constant 2017 prices over the forecast
period. Growth is expected to be driven by increasing disposable incomes, which will help to
© Euromonitor International
AIRLINES IN INDIA Passport 2
make airlines the preferred mode of travel for middle- and high-income consumers. However,
since low-income Indians still account for a considerable portion of the population, airlines’
growth potential will be threatened by the persistent demand for trains and buses for domestic
travel.
Low cost carriers is predicted to post the fastest retail value CAGR over the forecast period.
Competitive prices appealed to consumers who focus on the price and duration of flights
rather than on the quality of service. Scheduled airlines will continue to be preferred by the
business class and affluent leisure travellers. Meanwhile, charter is set to remain niche,
catering only to the richest consumers in the country.
The primary challenge for airlines is to improve the Indian railway system for domestic
tourism. Rail tickets are considerably more affordable than flights. Moreover, the strong efforts
to develop Indian railways is bringing significant improvements to rail infrastructure, thereby
posing as a challenge to the growth of domestic air travel in the forecast period.
Air intermediaries is set to drive retail value sales growth in absolute terms over the forecast
period. The leading air intermediary in the country, MakeMyTrip, is expected to maintain its
position, benefiting from the growing demand for convenience when booking flight tickets.
CATEGORY DATA
Table 1 Airlines Sales: Value 2012-2017
INR bn
2012 2013 2014 2015 2016 2017
INR bn
2012 2013 2014 2015 2016 2017
'000 persons
2012 2013 2014 2015 2016 2017
© Euromonitor International
AIRLINES IN INDIA Passport 3
Table 6 Low Cost Carriers Airlines Brands by Key Performance Indicators 2017
© Euromonitor International
AIRLINES IN INDIA Passport 4
INR bn
2017 2018 2019 2020 2021 2022
INR bn
2017 2018 2019 2020 2021 2022
© Euromonitor International