India-Gulf air traffic tipped to surge: CAPA

By Staff
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Google Oneindia News

New Delhi, May 30: Short-haul air traffic in the West Asia and to/from India is tipped to expand at double-digit rates each year for the remainder of this decade, according to a new report from the Centre for Asia Pacific Aviation (CAPA).

The West Asia Aviation Outlook report states that all ingredients for extraordinary short haul, intra-regional growth are present, including a youthful and affluent population. The pre-requisite: removal of access restrictions.

''The upside is difficult to predict,'' said CAPA's Executive Chairman Peter Harbison. ''But applying the recent experience in Asia Pacific market, especially southeast Asia, it is reasonable to assume that most reasonable forecasts will fall well short of the mark.'' Much will depend on the depth of liberalisation programmes followed by the region's governments. By year-end, there should be a more solid basis for longer term projections in this short haul sector, said Mr Harbison, one of those who authored the report.

Boeing and Airbus expect the West Asia market as a whole to expand by 5.5 per cent and 6.2 per cent per annum on average until 2025.

But the CAPA's assessment, based on prevailing government attitudes and current airline marketplace dynamics, is in fact for considerably higher intra-regional short haul growth over the next five years -- particularly when this is extended to India-West Asia routes.

If correct, this will have significant implications for single-aisle aircraft sales (both new and used) as new entrant airlines appear.

''As access limits to the subcontinent are relaxed, we would also anticipate the introduction by some operators of increasing numbers of widebody aircraft on Indian routes -- including the A380 -- in high density configuration by early in the next decade,'' said Mr Harbison. The early part of 21st century has delivered greater steps towards airline liberalisation than occurred in the previous 50 years (with the possible exception of the internal EU aviation market in the late 1990s).

The centre sees the West Asia as a major beneficiary of these developments when added to its ideal geographic position, highly supportive ''Inc'' policies, with excess airport capacity and the advent of very long haul aircraft.

Removal of archaic airline nationality rules -- unevenly but strongly supported particularly among the Gulf states -- effectively guarantees remarkably different rules governing the right of establishment within the next decade.

In practical terms, this means that innovative moves such as the ones currently being floated by AirAsia and Air China to establish hubs at Gulf airports will become commonplace by the middle of the next decade (and possibly well before that), said Mr Harbison.

If this prognosis is correct, the implications for expansion cannot easily be projected. They are beyond forecasting along traditional lines.

Even if the process of change is slower, the pressure for airlines to establish themselves in such a generally hospitable and globally competitive aviation environment will certainly ensure at least a considerably higher growth rate than presently being forecast.

''It will only require one or two airlines to make these moves for others to recognise the value of following suit,'' said Mr Harbison.

UNI

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