To the casual observer, it would seem that the aviation sector in India is doing well. Air traffic has grown at 14 percent over the last 10 years and India is expected to become the third largest aviation market in the world by 2020. But a closer look reveals that this growth has been concentrated in a few big cities. Airlines are in poor health, having lost more than $10 billion since 2009, with Air India contributing the bulk of that loss. Likewise, airports have been, for the most part, unprofitable.
In this article in Live Mint, SDG’s aviation and infrastructure specialist Arun Devanathan discusses the three structural challenges that need to be addressed to ensure sustainable growth in the sector. “The transition we need to make,” he says in the article, “is from viewing air travel as a luxury to looking at it as a means of mass transportation – the way we think of the railways.” This would impact everything from airport construction and airline business models to regulation and taxation – a necessary shift to fulfill the Indian aviation sector’s promise.
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