(18/05/23) The latest data from Sabre highlights India’s
incredibly strong growth potential with domestic travel already
above 100% of pre-pandemic levels and international catching up
rapidly.
With a population of more than 1.4
billion, India recently surpassed China as the world’s most populated
country, and has been predicted to overtake Germany to become the
world’s third biggest travel and tourism country.
With
major aviation developments in the country announced recently,
Sabre has sifted through data to examine the potential of India’s
travel growth, and what we may see in the coming years.
Key
findings include:
– Significant investments in the tourism
industry are expected to increase, and support, airline capacity
requirements for domestic and international travel.
– As of
March 2023, bookings are back to 100% of pre-pandemic levels for
domestic trips and are at nearly 100% of pre-pandemic levels for international trips, with domestic travel increasing in popularity
and domestic capacity having already exceeded pre-pandemic levels.
– Indian carriers are expected to play a significant role in
international travel.
– Passenger numbers are increasing
despite significantly higher international fares.
– The
growing middle-class segment in India, expected to double from one
in three to two in three Indians by 2047, has been forecast to travel
more as travel becomes more affordable.
Significant Investments
Major confirmed plane
orders by Air India, Akasa
Air and
IndiGo, with more expected, will result in close to 1,200 more
aircraft for Indian carriers over the coming years.
The Union
Budget of India 2023, presented in February this year, also
announced a series of developments to support potential tourism
industry growth.
Top three international routes with fare increases in India seeing an increase in passengers
A $12 billion investment was announced for
aviation infrastructure upgrades to support capacity increments,
with aims to increase the number of airports in India from 148 to
220 by 2025, alongside more aviation schools to prepare for
increased demand for pilots.
India is also refurbishing and
developing nearly 100 airports, under the “Revival of Unserved and
Under-served Airports” programme, aimed at making air travel more
affordable and accessible, while further supporting an increase in
capacity, especially for domestic travel.
As of March 2023,
bookings are back to 100% of pre-pandemic levels for domestic
trips and are at nearly 100% of pre-pandemic levels for
international trips, with domestic capacity having already
exceeded pre-pandemic levels
Sabre’s booking data shows that in
January 2023, there were 11 million domestic trips, versus 11.2
million in January 2019, showing a travel recovery of 98.8%.
In
February, domestic travel measured at 99.3% and eventually
exceeded pre-pandemic levels in March at 107.4%.
In fact, domestic
capacity has already exceeded 2019 levels since the beginning of
this year, signifying that there is potential for domestic travel
to grow significantly.
The strong growth for domestic travel
and domestic capacity can be attributed to more Indians having
turned towards domestic travel during the pandemic when they
couldn’t travel further afield, as well as ongoing improvements in
connectivity due to government investments.
In addition, India has seen a rise in low-cost
carriers (LCCs) recently, with such
carriers recording growth in domestic travel.
Domestic capacity
for LCCs has been recorded at more than 110% of 2019 levels in the
first 3 months of 2023. In Q1 2019, there were 23.2 million
travellers flying on LCCs for domestic routes. The number
increased to 26.5 million within the same period in 2023, an
increase of 14%.
For international travel, there were 5.7
million trips in January 2023, versus 6 million in January 2019,
showing a recovery rate of 95%. The recovery rate increased to
97.5% in February 2023, and is now at 99.5% in March 2023.
Capacity for international trips has also been planned to exceed
100% of 2019 levels by Q2.
Indian Carriers and International Travel
While domestic routes are predominantly served by
Indian low-cost carriers (LCCs), Indian carriers now serve 42.7% of all
international routes – an increase from 36% pre-pandemic.
Indian carriers could further grow on international
routes, given a recent request by the aviation minister for
domestic carriers (historically Indian) to fly more long-haul
routes. It was also reported that India will not be increasing air
traffic quotas for carriers from Gulf states, in line with this
push for Indian carriers to fly long-haul routes.
International Air Fares
Travel has resumed at an incredible pace even though average
international fares are 41.3% more expensive as of February 2023
when compared to pre-pandemic prices. Domestic fares have also increased, with fares
at 24.5% more than pre-pandemic prices as of February 2023.
Some in the industry say this exemplifies the
“revenge travel” phenomenon resulting from the long lockdowns,
plus the fact that capacity could not catch up with the pent-up
demand.
As more
Indian carriers add domestic and international capacities,
alongside aviation infrastructure upgrades, it is expected that
travel will become more accessible and affordable for India’s
rapidly growing middle-class population, encouraging them to travel.
A
pan-India survey reported that currently, one in three Indians
is considered middle-class and the number is expected to increase
to two in three by 2047.
In that event, the sheer population size
of India means that middle-class in India would be
expected to almost double from nearly 500 million people to 900
million by 2047, almost 3 times the population of the U.S.A. where the middle-class makes up only 50%, around 180 million.
In
China, 163 million are regarded as middle-class, 13.7% of the
population.
India’s Aviation Market – Exclusive 4K Video
Interview with Roshan Mendis, EVP and CCO of Sabre Travel
Solutions
To learn more about India’s aviation market and
what the recent deal
Sabre signed with Air India means to the company, Steven
Howard of TravelNewsAsia.com visited Sabre’s office in Richmond,
England to speak with Roshan Mendis, Executive Vice President and
Chief Commercial Officer at Sabre Travel Solutions.
In this exclusive interview, filmed on 17 May
2023, we discuss the
aviation industry’s development in India, how an airline decides which routes
to launch when it makes such massive aircraft orders, where India
is in terms of the use and development of NDC as a retail tool, the state
of travel agencies in the country, how Sabre is using AI to
enhance its solutions, and whether enough is being done
to ensure that there are sufficient qualified personnel to power
the aviation sector’s very ambitious growth targets.
We also talk about the Air India deal, which
products the airline will be using, what
percentage of Sabre’s business comes from India and how Roshan
foresees that growing, whether the company has any plans to expand
further in the country, and why there has been such a rapid
recovery in air travel despite the high air fares. All that and
much, much more in the exclusive video and podcast interview
below.
