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In a country where train travel has long been the dominant mode of transport, India’s aviation sector has
increasingly established itself as a safe, affordable and credible alternative. The number of passengers flown
by Indian airlines has more than doubled over the past seven years, compared with just a 6% rise in railway
passengers 1.
Moreover, as the world’s largest democracy with a population of more than 1.3 billion citizens, India’s
potential for further growth and industry development is very clear. Indeed, we expect air passenger
numbers to, from and within India to increase by 3.3x over the next 20 years, to more than 500 million
passenger journeys per year.
This strong growth outlook for air passenger demand will see India overtake Germany, Japan, Spain, and the
UK within the next 10 years to become the world’s third largest air passenger market.
These are exciting times for the air transport industry in India.
Of course, the future will not be without challenges – for those in the industry and policy-makers and
regulators alike. These challenges will include making sure that the right type of infrastructure is put into
place, at the right time and in the right location to ensure that the demand can be met, as well as ensuring
that the regulatory environment is one which successfully fosters a competitive and healthy airline transport
sector that will continue to make a major contribution to the Indian economy in the years to come. A robust
and financially sound industry is critical to delivering the benefits that aviation can bring – creating jobs,
bringing families together, facilitating business, and supporting trade, investment and economic growth.
Events such as this Global Aviation Summit 2019 show that the importance of the industry is well-understood
in India and underscores the initiatives that are already being taken to position the country for the key role
it will increasingly have in global aviation leadership. It is my pleasure to contribute this assessment to the
Summit.
Brian Pearce
Chief Economist
International Air Transport Association
Geneva
January 2019
1http://www.indianrailways.gov.in/railwayboard/uploads/directorate/stat_econ/IRSP_2016-
17/Facts_Figure/Fact_Figures%20English%202016-17.pdf
Table of Contents
Preface ................................................................................................................................................................. i
Looking forward................................................................................................................................................11
• In October 2018, the domestic India market recorded its 50th consecutive months of double-digit year-
on-year growth; an outstanding performance and one which is showing no signs of ending anytime soon.
• The air transport market in India employs more than 400,000 people and supports another 940,000
more in the supply chain. Overall the industry contributes some US$35 billion annually to India’s GDP.
• The fundamental drivers of air passenger demand – including population and demographics and
increasing incomes – are favorable and supportive of ongoing growth over the longer-term.
• Over the next 20 years IATA forecasts growth of 6.6% per year on average – the number of annual air
passenger journeys is forecast to increase by more than 414 million over the period, moving to
over570 million journeys in 2037.
• The industry must continue to work constructively with its key stakeholders – including the government
and policy-makers – to ensure that this sizeable increase in demand can be met and to realise the full
benefits that the air transport industry can deliver to India.
15%
order of 15-20% per year (Figure 2).
10%
-10%
Figure 1: Total air passenger journeys to, from & 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
140
growth in India has not been confined to just the
120 past few years, however; the total number of air
100 passengers has more than doubled over the past
80
seven years, from a level of 79 million journeys
60
40
undertaken in 2010.
20
Indeed, utilising data from the World Bank and
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ICAO, which measures the number of passengers
Source: IATA carried by airlines based in the particular country,
we can see the growth of the Indian market in a
longer-term perspective (Figure 3, over).
From flying just 16 million passengers 20 years
ago, Indian airlines have seen their passenger
is stark. 40%
30%
100
Germany Reflecting the relative size of the domestic and
Brazil
80 international markets, the composition of the
Canada
60
Korea current in-service fleet is heavily tilted towards
40 Australia narrowbody aircraft.
20 Spain
International
38% Narrowbody,
75.9%
0%
-10%
-20%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: IATA
3
This is evident both in terms of a strong rise in the Against this backdrop of developments in demand
number of airport pairs in operation within India – and capacity, the India domestic passenger load
these have risen by more than 50% since 2015 – as factor remains elevated.
well as increases in the average frequency of
Indeed, in February 2018, it exceeded 90% for the
flights on each route (Figure 11).
first time ever, hitting an all-time high for the
Both of these factors ultimately translate into time seven global domestic markets 4 that we track each
savings for passengers and therefore have similar month (Figure 13).
stimulatory impacts on demand as reductions in
Figure 13: Domestic India – passenger load factor
air fares.
performance
Figure 11: Components of India’s domestic air 95% % of available seat kilometres Domestic passenger load factors
Domestic India
network growth: new routes vs increased 85%
The shaded area shows the min/max load factor range for
the 7 global domestic markets we track each month.
frequency*
75%
Number of airport pairs Number of flights per week
700 36
65%
34
Domestic routes (# airport pairs in operation), left axis
600 32 55%
Average flight frequency, right axis Failure of
Tōhoku earthquake Kingfisher
30 impact in Japan
45% Airlines
500
28 9/11 SARS impact in China
26 35%
400 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
24
200
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
18
The bigger picture is that the current load factor
Source: SRS Analyser * aircraft >19 seats, at least 1 flight
performance represents a significant turnaround
per week on average from the early-2000s when India regularly posted
the lowest domestic passenger load factor
Overall, India domestic demand (measured by amongst our group of countries, even dipping
RPKs) have grown faster than the corresponding below 50% on occasion.
rate of capacity growth (measured by available
The evolution and maturity of India’s domestic air
seat kilometers or ASKs) in recent years.
transport market can be illustrated by comparing
While the degree of outperformance has the experiences around the time of 9/11 with that
moderated from that seen in late-2014 and early- of late 2014.
2015, annual RPK growth has still exceeded that of
In the former, domestic capacity continued to
ASK growth by 3 percentage points on average
increase even as demand slumped, while in late-
each month over the past two years (Figure 12).
2014 Indian airlines slowed capacity growth to
Figure 12: India Domestic – passenger demand support the load factor even as demand was
(RPKs) and capacity (ASKs) growing strongly.
% year-on-year
60%
In part, this appears to reflect the increasing
50%
40%
influence of competitive (market) pressures over
Revenue passenger kilometres
30% time via a mix of policy, regulatory and industry
20%
developments.
10%
-30%
generate adequate returns for their investors.
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Source: IATA
4
India, China, the US, Brazil, Russia, Japan and Australia.
4
Figure 14 puts the strong and sustained growth Figure 16: World’s top ten growth airports 2017 –
performance of the India domestic market into a passengers handled
global perspective.
Since 2014, in terms of RPKs flown India has
overtaken Australia, Japan, Brazil, and Russia – all
of the main domestic markets that we follow, with
the exception of China.
The India domestic market now accounts for
around 1.5% of total industry-wide RPKs and is
larger than all of the domestic markets that we
follow, with the exception of China and the US.
Source: ACI, IATA WATS
Figure 14: Main global domestic air transport
markets, share of industry-wide RPKs
1.6%
% of industry-wide RPKs
India’s International air transport
1.5%
India
market
1.4%
Russia
1.3%
In 2017, around 60 million international
1.2%
Japan
Brazil
passengers flew to/from India, up from 55 million
1.1% in 2016 (Figure 17).
1.0%
Australia Figure 17: Number of origin-destination air
0.9%
passenger journeys per year – India International
0.8%
2010 2011 2012 2013 2014 2015 2016 2017 Million pax per year
70
Source: IATA
60
20
Figure 15: Largest city-pair routes Within India &
10
their 2017 global ranking
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
#pax 2017 YoY growth Global rank
1 Mumbai-Delhi 5,566,510 1.9% 7 Source: IATA
2 Bangalore-Delhi 3,492,889 -1.5% 20
3 Bangalore-Mumbai 2,716,801 3.0% 35 While the international market has not grown as
4 Kolkata-Delhi 2,153,297 5.6% 52
5 Delhi-Pune 1,997,165 17.5% 63 fast as its domestic counterpart, the sustained
6 Delhi-Hyderabad 1,891,240 3.8% 75 period of robust growth, over a number of years,
7 Delhi-Chennai 1,836,447 -5.4% 80
is still readily evident.
8 Mumbai-Goa 1,748,145 -0.2% 89
9 Mumbai-Chennai 1,717,468 5.1% 91
The 2017 outcomes represents an increase of
10 Delhi-Goa 1,692,230 23.6% 96
10.3% on 2016 and is the third consecutive year of
Source: IATA WATS
double-digit international passenger growth
In a similar way, of the top 10 growth airports in (Figure 18).
terms of passengers handled in 2017, two are
located in India, namely Delhi and Bangalore
(Figure 16).
In terms of global rankings, Delhi is #16 globally in
terms of passengers handled and Mumbai is #29.
5
Figure 18: Annual growth in origin-destination pairs has been increasing, so too have the average
passenger journeys – India International number of flights on the international city pair
20%
% growth year-on-year routes (Figure 20).
15%
Figure 20: Average flight frequencies on
international airport pairs served, selected
10%
countries
Average flight frequencies (per week per int'l airport pair)
5% 14
India
12 12.1
0%
10 Brazil
8.6
-5% China 8.4
8
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
7.1
Source: IATA 6
Russia
800
China A choice of flight times is particularly important for
business travelers who value the flexibility the
600
Russia
576
additional frequencies provide.
400
India 304 The bulk of international traffic is to the Middle
200
Brazil 149 East and Asian destinations, with these two
0 markets accounting for around 70% of the total
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: IATA, SRS Analyser share of international traffic from India in 2017
(Figure 21).
In relative terms, the India market appears to have
Figure 21: Share of international traffic by
considerably less international city pairs served
continent, 2017
than either China or Russia. Sth America,
Africa, 2.8%
0.2%
Nth America,
However, Indian travelers have ready access (via 11.6%
6
10 international markets account for two-thirds of Figure 23: Top freight country pairs from India,
the total (Figure 22). 2017
Other , 22.2%
The United Arab Emirates (UAE) leads the way,
with almost 20% of the total, followed by Saudi UAE, 28%
Thailand, 3%
2017
Saudi Arabia, 5%
Qatar, 11%
Singapore, 5%
Other, 32.9%
UAE, 19.8%
Hong Kong, 6% UK, 6% Ethiopia, 7%
Source: IATA
US, 9.3%
5
The top freight country pairs cover all scheduled traffic,
excl. integrators. The data are uni-directional in nature.
7
In terms of global rankings, Dehli and Mumbai For India the growth of the LCC market has been
appear in the list of the top 50 airports for freight significant. In 2004 there were just over 5 million
handled, at #29 and #31, respectively. total LCC seats offered. Incorporating the
schedules data for the remaining months of 2018,
Figure 25: The top 10 growth airports 2017 – cargo
this figure has risen to almost 135 million seats –
handled
an increase of 27x in the 14-year period
(Figure 27).
Figure 27: Increase in the number of LCC seats in
the Indian air transport market
Total LCC seats (DOM+INT)
160,000,000
140,000,000
120,000,000
100,000,000
80,000,000
40,000,000
20,000,000
0
2004 2006 2008 2010 2012 2014 2016 2018
Business models & industry Source: SRS Analyser
structures continue to evolve
Even if you consider just the past five year period,
Globally, air transport is a highly dynamic industry
the number of LCC seats in the Indian market has
and in this regard, the industry in India is no
more than doubled, from 64 million in 2013.
different.
One of the key competitors for airlines
As markets evolve and customer demands change,
domestically is the extensive train network in
airlines must constantly review and update their
India. The train system carries more than 8 billion
operations and product offering to ensure that
passengers per year. Many of these will be
they continue to meet the market need.
commuter trips over relatively short distances, for
One important part of this story is the evolution in which air travel is not a viable substitute.
business models and market structures observed
However, a proportion of these train journeys
in the industry, notably the rise of the so-called
could potentially be taken by air; the market
Low Cost Carrier (LCC) business model (Figure 26).
opportunity for an affordable airline alternative is
All told, at the global level, LCCs account for clear.
around 28% of the total number of seats flown.
Looking at the share of LCC seats in the Indian
Figure 26: Proliferation of the LCC model globally market brings to light a number of interesting
observations.
Firstly, around 55% of all seats in the market are
offered by low cost carriers (Figure 28). Focusing
on the domestic market alone, the LCC share of
total seats is almost 70%.
While the share of LCC seats offered on India’s
international routes is much smaller, at just under
25%, this share has risen from essentially zero in
2004.
Source: SRS Analyser
8
Figure 28: Share of LCC seats in the Indian air Amongst Indian airlines, there are currently
transport market around 600 aircraft in service. Evidencing the
LCC seats, share of total optimism and positive outlook for the sector, and
80%
70%
providing some insights as to the near-term
60%
INT DOM TOTAL
evolution of the market, some 1123 aircraft are
50% currently on order for India. The bulk of these
40% deliveries are currently slated for delivery to
30% IndiGo – a major low cost carrier (Figure 29).
20%
10%
Figure 29: Aircraft currently on order – Indian
0% airlines
2004 2006 2008 2010 2012 2014 2016 2018
Air India
Source: SRS Analyser
Vistara
to fly for the very first time. In more mature Source: CAPA
markets, LCCs have deepened the market allowing
people to fly more often.
Given its prevalence, the LCC model cannot be
Financial performance
ignored in any assessment of India’s air transport
Historically, the global air transport industry has
market. However, LCCs aren’t the only way in
struggled to generate consistent profits. Even in
which the industry is evolving.
periods of strong demand, profitability has,
Increasingly, we are seeing a blurring of the historically, proven to be elusive.
traditional distinction between full service airlines
While, as a rule, airlines have been able to pay
and LCCs as each are increasingly adopting
their debts, equity investors typically have not
practices typically the domain of the other,
been adequately compensated for risking their
resulting in a so-called ‘hybrid’ business model.
capital in the sector.
More broadly, there are range of new and
The last three years – and we expect 2018 to be
alternative investment and alliance or partnership
the fourth – have seen a turnaround in this
structures emerging globally which add a new
situation at the global, industry-wide level.
dimension to the industry, as airlines try to find
new and innovative ways to expand their The industry is now generating returns which
networks and their product offering. In some exceed its cost of capital, and delivering a net
global markets, the changing industry structure is profit figure of around US$30 billion per year
one of consolidation rather than expansion. (Figure 30).
9
Figure 30: Global airline industry financial Figure 32: Financial performance of selected
performance Indian airlines vs the global industry, EBIT margin
10.0
% revenues
Global commercial airline profitability
US$ billion
40
2013-2018*
8.0 EBIT margin
30 15%
6.0 EBIT margin (left axis)
20 10%
4.0
2.0 10 5%
0.0 0
0%
-2.0 -10
-5%
-4.0
Net post-tax profit (right axis) -20
-6.0 -10%
-8.0 -30
Air India SpiceJet IndiGo
-15%
-10.0 -40 GoAir Jet Airways Industry
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
-20%
2013 2014 2015 2016 2017 2018
Source: IATA
Source: Airline Analyst *data for Indian airlines related to
Unfortunately, for the most part, the airlines in year-ended 31 March, industry data relate to the calendar
India have not yet been able to match this recent year prior
improvement in the industry-wide financial
performance (Figure 31). It is clear that the overall industry in India is not
yet on a sound financial footing and this remains a
Over the period shown, most airlines have work-in-progress for the industry and its key
struggled to consistently generate a net profit stakeholders, including policy-makers.
after tax; the main exception being IndiGo who,
along with GoAir, are the only airlines to have While the industry has demonstrated resilience in
generated profits in each year of the period the face of various shocks and disruption
shown. The recent financial performance of Air (including the global financial crisis and airline
India has been well-documented elsewhere. exits), financial stability is a key factor for the
industry to be able to successfully develop and
Figure 31: Financial performance of selected grow.
Indian airlines, Net profit after tax 2013-2018*
Net profit after tax, US$m
500
300
-300
India
-500 6.2m jobs and a $35bn contribution to
-700
Air India SpiceJet IndiGo
GDP
-900
GoAir Jet Airways The air transport sector makes a significant
-1100
2013 2014 2015 2016 2017 2018 contribution to the Indian economy (Figure 33).
Source: Airline Analyst * data relate to year-ended 31 March
Analysis undertaken by Oxford Economics shows
In a similar way, many Indian airlines have been that the air transport sector directly contributes
unable to match the global industry performance 404,000 jobs in India. This includes airlines, airport
in terms of operating (EBIT) margin either. operators, airport on-site enterprises such as
restaurants and retail, aircraft manufacturers and
The performance of GoAir and IndiGo are again
air navigation service providers.
notable over the period, as is the improved
financial results of SpiceJet in more recent years. In addition, by buying goods and services from
local suppliers the sector supported another
943,000 jobs across the supply chain.
10
Figure 33: The value of aviation in India Looking forward
Sound fundamentals point to a bright
future
IATA’s long-term passenger forecasts for India
highlight the potential for significant growth in air
transport demand over the next twenty years.
A favorable population and demographic profile –
notably a relatively young population – along with
the expected continuation of economic
Source: Oxford Economics, IATA development and growth in household incomes
underpins this very positive long-term outlook.
On top of this, the sector is estimated to have
India’s population is expected to increase further
supported a further 553,000 jobs by paying wages
over the forecast horizon, rising from 1.3 billion
to its employees, some or all of which are
persons currently to 1.6 billion by the end of our
subsequently spent on consumer goods and
forecast horizon (Figure 34).
services and create employment in other sectors
of the economy. This ongoing population increase is expected to
see India overtake China as the world’s most
Air transport brings tourists and investment into populous country within the next decade. Of itself,
India, and helps businesses trade their goods and a growing population will typically have a positive
services around the world. Foreign tourists impact on the demand for air transport services.
arriving by air to India, who spend their money in
Figure 34: India’s population forecast
the local economy, are estimated to have
Population , billion persons
supported an additional 4.3 million jobs. 1.8
1.6
1.4
But it’s not all just about employment.
1.2
1.0
The air transport industry (directly and indirectly)
0.8
is estimated to have supported an $10.4 billion 0.6
0.0
further $21.2 billion gross value added 2006 2011 2016 2021 2026 2031 2036
Furthermore, the air transport jobs tend to be In addition to the expected increase in population,
highly productive – not just for their airline India is also forecast to become a richer country
employers but for the economies in which they over the next 20 years.
are employed.
After adjusting for inflation, per capita incomes
The average air transport services employee in are expected to increase to almost US$5,000 per
India generates nearly INR1.3 million in Gross year in 2036, up five-fold since 2006 and more
Value Added annually, which is around 10 times than double the current level (Figure 35).
more than the economy-wide average.
11
Figure 35: India’s rising incomes – GDP per capita Figure 37: India’s forecast air passenger demand,
5,000
GDP per capita, real US$ 2017-37
4,500 Million O-D passengers per year
600
4,000
3,500 500
3,000
2,500 400
2,000
300
1,500
1,000 200
500
100
0
2006 2011 2016 2021 2026 2031 2036
0
2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037
Source: Oxford Economics
Source: IATA/TE
At the same time, the number of middle-class
households in India is expected to continue to The additional 359 million passengers will not be
increase over the coming decades, to around 20% sourced evenly from the domestic and
by 2036, compared with just 2% in 2006 (Figure international segments.
36). Domestic passengers will account for around 63%
Figure 36: Increase in the share of middle class of the total growth over this period, or 228 million
households in India additional passengers.
% share of middle class households
20%
Forecast to rise by a further
Foreign passengers will contribute less to overall
18%
16%
13 percentage points over
the next 20 years
growth, representing 37% of the total market
14% growth, equal to 131 million additional passengers
12%
(Figure 38).
10%
Risen by 5 percentage
8% points since 2006 Figure 38: Expected increase in Indian air
6%
4%
7% in 2017
passenger demand 2017-37, and DOM vs INT
2% contributions
0%
Passenger flows (million)
2006 2011 2016 2021 2026 2031 2036 400
300 INT
36.6%
The latest IATA/Tourism Economics (TE) forecasts 250
suggest the demand for air travel to, from and 200
India is forecast to gain an additional 359 million Total pax INT & DOM
12
The modest subtraction from growth (0.5 to maintain their ranking over the forecast period
percentage points) from trade mainly reflects the (Figure 41).
Oxford Economics view that the economy will
The mature air transport markets of the UK and US
become slightly less trade intensive over the
are expected to see the largest decline in rankings,
forecast horizon (Figure 39).
losing 3 places and 2 places to #9 and #6,
Figure 39: Sources of growth in India’s air respectively.
passenger demand, 2017-37
Figure 41: Top 10 Indian air transport markets,
7
%, %age pt Living standards Pop'n & Demog. Technology Trade
2017-37
6 0.8 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037
0.6 Dom. India 1 Dom. India
5
UAE 2 UAE
4
S. Arabia 3 S. Arabia
3 6.1
US 4 Singapore
5.1
2 Singapore 5 Thailand
1 UK 6 US
0 Thailand 7 Oman
-0.5
-1 Oman 8 Qatar
Total pax Drivers
Malaysia 9 UK
Source: IATA/TE Kuwait 10 Malaysia
India 7 Japan
generic global scenarios.
Italy 8 Germany
France 9 Thailand
The scenarios are designed to demonstrate the
Indonesia 10 France possible impacts on air passenger demand of both
S
Source: IATA/TE a more favorable future outcome (where there is
policy stimulus and further air transport market
The composition of the top ten air transport liberalization) and a less favorable future outcome
markets for India show relatively little change over where policies are more restrictive and there is a
the 20-year forecasting horizon. pick-up in protectionism.
Kuwait is set to drop out of the top 10, to be The effect of these two broad scenarios on India’s
replaced by Qatar as the only compositional
air passenger demand forecasts are depicted in
change expected. The top 3 markets (Domestic
Figure 42.
India, the UAE and Saudi Arabia) are all expected
13
Figure 42: India’s air passenger demand outlook More recently, a new draft scheme has been
under three scenarios, 2017-37 announced seeking to extend the UDAN
1000
Million O-D passengers per year framework to international routes.
800
Baseline
Travel & Tourism Competitiveness
Policy Stimulus & Market Liberalisation
600
The World Economic Forum’s (WEF) Travel and
Pick-up in Protectionism
Tourism Competitiveness Index provides a
400
framework to assess and benchmark the factors
200 and policies which impact a country’s T&T sector
competitiveness.
0
2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037
In its latest report, India ranks #40 out of the 136
Source: IATA/TE
countries assessed, a strong improvement of 12
Under the less favorable scenario, India’s air places over the previous survey (Figure 43).
passenger market will still grow, albeit at a slower India’s strengths include its vast cultural and
pace, of 4.9% per year. While this difference natural resources (ranked 9th and 24th,
doesn’t seem significant, it translates to more respectively), and its price competitiveness
than 100 million less passengers per year in 2037 advantage (10th).
than under the ‘constant policies’ scenario.
The WEF notes that India continues to enrich its
On the upside, a more favorable policy backdrop cultural resources, protecting more cultural sites
could see air passenger demand for India growing and intangible expressions through UNESCO
at a near-double digit annual pace of 9.1%, World Heritage lists, and via a greater digital
generating an additional 385 million passengers in presence.
2037 compared with the constant policies
scenario. This would take the number of International openness (55th, up 14 places),
passengers travelling to, from and within India by through stronger visa policies implementing both
air to just over 900 million in 2037. visas on arrival and e-visas, has enabled India to
rise up through the global ranking.
National Civil Aviation Policy
In the Indian context, no consideration of the The travel and tourism sector benefited from
policy environment could overlook the recent improvements in India’s transport infrastructure,
National Civil Aviation Policy (NCAP). which the WEF notes has traditionally been a
challenging area.
The 2016 introduction of the NCAP brought a
number of important initiatives and In this regard, it is notable, that the air transport
developments to India’s air transport industry. infrastructure sub-component places India 32nd
currently in the global ranking.
The policy addresses a range of key areas for civil
aviation including airline operations, safety and Figure 43: India’s travel & tourism competitiveness
security, international traffic rights and
maintenance, repair and overhaul (MRO)
operations.
Source: WEF
14
Nonetheless, there is always room for A strong and vibrant business environment
improvement which could lift India’s ranking into stimulates employment opportunities, investment
the top quartile of countries. and trade which the air transport sector can both
help to enhance and benefit from.
Within the air transport infrastructure category,
India ranks relatively low (133rd) in terms of The World Bank’s Ease of Doing Business Index is
airport density (the number of airports per million designed to provide objective data for use by
of population) and 108th for the number of governments in designing sound business
departures per 1000 population. regulatory policies.
While health conditions in the country continue to The latest index reveals strong improvement,
improve, the WEF includes India towards the ranking India at #77 of 190 countries, ahead of the
lower end of its global rankings for this indicator South Asia regional average.
(104th).
Key challenges for India highlighted by the World
Similarly, the WEF notes that while India’s ICT Bank include dealing with enforcing contracts and
readiness (112th), security concerns (114th), resolving insolvency.
tourist service infrastructure (110th) and human
Importantly, and as was the case with the WEF
resources (87th) are slowly improving, further
work is required across these dimensions to lift measure discussed above, improvements in the
India’s overall global ranking. broader business environment in India are
underway; India’s ease of doing business ranking
Importantly, the WEF is clear that steps are has risen from #132 just five years ago, clearly
already being taken in the right direction to moving in the right direction.
address the shortcomings and concludes that “the
Indian transport and tourism sector presents
significant opportunities that are yet to be
reaped”.
78 79
80
64 67
60
40 42
40 34
30
26
19
20 15 16
11 13
4 7
Source: WEF
16