Everyone today looks upto India as the next destination for growth. The Ministry of Civil Aviation, in its draft National Civil Aviation Policy, has captured the attention of everyone with the claim of a large middle class population, and the promise of certain reforms that should may better the ease of doing business.
We appreciate what the Ministry has done, is doing, and will do. But certain claims must be taken with a pinch of salt, must be questioned, and analysed, just to prevent over-optimism and to make room for realism. Like for example:
- India is a 300 million strong population of middle class persons. The Ministry targets each of these 300 million to fly atleast once in their life. Pertinent questions: What is the definition of middle class? What subset can really afford air travel? These questions are important to prevent overcapacity in the Indian market based on optimism.
- India targets 300 million domestic ticketing by 2022. That means, calendar year (CY) 2021 must end with 300 million domestic passengers in a single year. India will end CY 2015 with 80 million domestic passengers. What is the compound annual growth rate (CAGR) required to touch 300 million in CY 2021? Is this CAGR too high to achive? What do market leaders like Airbus say?
Today, we focus on these two issues, which form part of the Ministry’s vision, and we see if this is achievable. Our views on the Regional Connectivity Scheme and the 5/20 are ready, which we hope to release tomorrow. We will also be commenting on Scheduled Commuter Airlines (SCA) and Safety, and lightly touch upon Aeronautical ‘Make in India’, Aviation Education & Skill Development, and Air Navigation Services.
To read about the first two issues, please click here.