Saturday, December 23, 2006

Why Invest in India: Booming Air Travel Industry

In my last article I had written about why retailer companies must invest in India. See: Why Invest in India? . I am continuing this series with the next installment - with opportunities in travel industry.

Ever since India started on market reforms - deregulation of civil aviation, the number of Indian travelers (by air) is exploded. According to one estimate approximately, 75 million passengers travel by air per year in 2005. This number includes both domestic & international air travel. This number is expected to grow exponentially to approximately 350 million passengers by 2020. According to Ministry of Civil Aviation, Indian carries will acquire about 2000 planes in the coming 20 years. ( This is in addition to leases of aircrafts) In 2005 alone, Indian carriers placed an order for 327 airplanes.

This exponential growth would lead to huge business opportunities to various industries catering to air travel passengers and goods transportation. Companies will have big opportunities in hotels, car rentals, taxis, cargo logistics, aircraft maintenance, travel agents, airport security equipment, catering services, pilot training institutes, staffing companies, airport infrastructure and related areas.

India has embarked on a long journey towards airport modernization aimed to make antiquated Indian airports on par with the worlds best. This privatization move has created tremendous opportunities for foreign investors in infrastructure development and equipment suppliers. Seimens is a major investor in Bangalore Airport project.

By 2020, the number of airline passengers in India is likely to exceed that of USA. Sensing a mega opportunity, international hotel chains such as Hilton, Marriot and few others are lining up investments in India. Car rental agencies such as Avis & Hertz are already operating in India and other agencies are on the way.

Closing Thoughts

Indian civil aviation sector is seeing an annual growth rate of 37% - and a huge latent demand is yet to be tapped. With further liberalization and entry of Indian carriers into international routes, the number of passengers is bound to increase. This exponential growth is an ideal opportunity for foreign companies to invest in India. India is already one of the largest market for Airbus and Boeing. Soon companies will setup aircraft maintenance operations in India. American & European companies must now plan their rapid entry into India in next few years or they will lose this golden opportunity forever.

References:
Steady rise in airline passenger traffic

Also see:
Why Invest in India - Power Generation
Why Invest in India: Innovation & Creativity
Knowledge Management - The blood & lifeline of any company
Creating a Culture for Innovation and Protecting Intellectual Property - Part 1
Creating a Culture for Innovation and Protecting Intellectual Property - Part 2
Protecting IP Assets of an Organization
Types of Intellectual Property
Business Creativity and Innovation
Indian Style of Innovation
Joint Ventures is a preferred way to Enter India
Emergence of Indian MNCs
Global Retail Giants are Eager to Enter India

4 comments:

Linda said...

I think that India is a great country. I'm even thinking about India vacation. There should be more investments!

Seenath Kumar said...

I really agree with you investing in Indian air travel industry will really grow up your investment because country has got a good tourism.
Airline Careers

Malathi said...

Hi there, awesome site. I thought the topics you posted on were very interesting. I tried to add your RSS to my feed reader and it a few. take a look at it, hopefully I can add you and follow.

Malathi said...

Hi there, awesome site. I thought the topics you posted on were very interesting. I tried to add your RSS to my feed reader and it a few. take a look at it, hopefully I can add you and follow.

Catering Equipment