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Indian aviation market would turn into battle-field: Experts

Last Updated: Friday, September 20, 2013 - 20:11

New Delhi: The Indian market would turn into a battle-field between Gulf and Southeast Asian airlines targeting the growing air traffic, with Jet and Etihad and start-up airlines like Air Asia India and Tata-Singapore Airlines also wooing Indian travelers, experts said on Friday.

Almost all experts termed the Tata-SIA deal as a welcome development in the lucrative but under-penetrated Indian market and expressed hope that enhanced competition would make air travel more affordable.

"This is a very welcome development considering that the air market in India is under-penetrated and has tremendous potential for growth.

"Additional capacity will help linking more cities as well as adding more seats on existing routes, thus growing the market by making air travel more affordable for the common man," travel portal Yatra.Com President Sharat Dhall said.

Pricewaterhouse Cooper India`s Executive Director Dhiraj Mathur said though there was over-capacity currently, the market was grossly under-served. The presence of another airline would help cater to the latent demand.

"There is a lot of latent demand. Once the prices improve both because of the rationalization of taxes and airport costs and increased competition, the demand will also surge," he said, adding there was plenty of scope to enlarge the pie.

Amber Dubey, Partner and Head (Aerospace and Defence) at global consultancy KPMG, said the development affirmed India`s reputation as a lucrative aviation market in the long run, despite the short-term man-made problems like excessive taxation.

"This will open up competition in the westbound routes from India," Dubey said, but added "this deal may create some problems in the Tata-AirAsia JV. Questions are being asked about the Tatas entering into two separate JVs."

The experts, while referring to the Jet-Etihad deal and the emergence of the Tata-SIA airline and AirAsia India, said the Indian air traveller would be wooed in the long run to visit North America via the Gulf or Southeast Asia.

Strong airlines on both sides of India would turn the airports at Indian cities like Delhi major hubs for such traffic, they said.


First Published: Friday, September 20, 2013 - 20:11
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