Despite Global Rank 3, Only 4% of Air Traffic; Huge Growth Potential Ahead
New Delhi: India’s aviation sector is full of untapped potential, says a new report by Jefferies, a leading global financial services company. Although India ranks as the third-largest aviation market by passenger volume, it still accounts for only around 4% of global air traffic, despite having nearly 18% of the world’s population.
This suggests that India’s air travel sector is significantly underpenetrated. The country’s air travel per capita is still low, pointing to a huge opportunity for future growth.
The report underlined that India handles about 0.2 billion air passengers annually, compared to China’s 0.7 billion. While India operates with just 850 aircraft and 150–160 airports, China boasts over 4,000 aircraft and 250+ airports.
India also lacks a high-speed rail network, meaning air travel could play a bigger role in the country’s transport future. Currently, most long-distance travel in India still depends on conventional rail.
Jefferies believes rising incomes, rapid urbanization, expanding fleets, and new airport infrastructure will drive steady high single-digit to low double-digit growth in the aviation sector over the next few years.
India is also expanding both domestic routes and direct international connections, helping improve air connectivity across the country and beyond.
However, the report also pointed out several challenges. These include:
Aircraft shortages and supply chain delays
High taxation on Aviation Turbine Fuel (ATF)
Limited MRO (Maintenance, Repair & Overhaul) facilities
Geopolitical tensions causing airspace issues
Recent safety concerns following the Air India crash and fleet groundings
Despite these hurdles, Jefferies believes India’s aviation industry is on a strong growth path and has a long way to go before it reaches its true global potential.
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