Statsguru: Six charts explain India's aviation industry potential

The aviation sector has been buzzing in recent days with news on final approval being granted to Rakesh Jhunjhunwala-backed Akasa Air, pay hikes for IndiGo staff, and Air India hirings to recapture the skies as a Tata group company.

This comes as domestic air traffic is back to levels last seen before the pandemic (chart 1). Most airlines had four out of five seats occupied in May, and the air freight segment also showed signs of recovery (charts 2,3).

The number of international flights as of May 2022, however, was still only at around 80 per cent of the level seen in 2019. Domestic flights have exceeded their May 2019 figure (chart 4).

A comparison with other key aviation markets shows how under-penetrated India is in terms of the aviation industry. India has 0.13 seats per capita compared to 3.1 in the United States and Australia. Emerging market peers also have higher numbers than India. China’s seats per capita number is 0.49. Brazil is at 0.57 and Russia at 0.61 (chart 5).

Much of India’s travel has traditionally taken place between metros. The annualised growth rate in travel between metros was around 7.8 per cent between the financial year 2009-10 (FY10) and FY15. It remained at nearly the same level (7.7 per cent) between FY15-20. Travel between non-metro areas grew faster. It was rising at an annualised rate of 10.5 per cent between FY10-15. This increased to 31.2 per cent between FY15-20 (see chart 6).

The latest entrant, Akasa, is said to be focusing on connecting tier-II destinations.  It is likely to start operations in July.
 

StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines