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Flying high

India’s air transport industry had been dominated by state-owned monopolies, but after the government opened up the sector a few years ago, there has been a sea-change.

A study on the economic and social benefits of air transport, conducted by Oxford Economics on behalf of the Air Transport Action Group, a not-for-profit representing the industry, came to the conclusion that aviation is a major contributor to global economic prosperity and plays a vital role in facilitating growth, particularly in the developing world.

The report, marking the centenary of the commercial aviation sector, noted that the industry supported 58.1 million jobs worldwide and its impact on the global economy added up to $2.4 trillion. The enormous benefits that accrue to an economy by the aviation sector can be gauged in countries like India, where hundreds of thousands of new jobs are being created as billions of dollars are invested in civil aviation infrastructure.

India’s air transport industry had been dominated by state-owned monopolies, but after the government opened up the sector a few years ago, there has been a sea-change. Despite intense competition, two new airlines — one a full-service carrier in a tie-up between the Tatas and Singapore Airlines, and the other a low-cost carrier in a joint venture between the Tatas and AirAsia, Malaysia’s spunky operator — have entered the fray, adding to the fun.

Passengers, who are flooded with offers including flash sales of seats and hefty discounts, are responding overwhelmingly. Millions of first-time fliers, including thousands from rural areas, are taking to the skies. And though a majority of India’s carriers are still mired in losses, a few bold players are investing huge sums in building up their fleet.

IndiGo, the largest Indian domestic carrier and also the most profitable, has just announced another order for 250 Airbus A-320neos, at a cost of $25.7 billion. India’s domestic skies are today being serviced by a mere 400 aircraft, and with passenger traffic expected to surge, experts predict airlines will have to order for hundreds of new planes. Airbus estimates India’s carriers will have to acquire 1,300 aircraft, at a cost of nearly $200 billion by 2032.

The European aircraft maker and its American rival Boeing have projected that demand for aeroplanes will soar over the next 20 years. Boeing has forecast that the number of commercial aircraft the world over would double, topping 40,000 in less than 20 years. With replacements of ageing, fuel-guzzling planes, there will be a demand for 35,000 new aircraft worth $4.8 trillion, it has said.

Airbus too has come out with somewhat similar figures. According to its Global Market Forecast for 2014-2033, the European major has predicted there will be need for 31,350 new passenger aircraft and freighters at a value of nearly $4.6 trillion.

Much of the demand will be from regions including the Middle East and Asia, especially India and China.