India's Aviation Sector Flourish Amid External Risks, Says Vistara CEO

India’s aviation sector continues to thrive in spite of potential external pressures says Vistara Airlines CEO.

What Happened: Vistara Airlines’ CEO, Vinod Kannan, in a recent interview with CNBC, expressed that the demand for aviation in India is still on an upward trajectory. However, he also acknowledged that certain factors like fuel costs and the strong U.S. dollar could potentially disrupt this growth.

Kannan emphasized that Indian airlines have always been vulnerable to external pressures, especially fuel costs and currency depreciation. He also underscored the importance of closely tracking fluctuations in oil prices.

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Despite these potential hurdles, India’s aviation sector is witnessing a surge. By 2030, the country is projected to be among the top four global travel spenders, primarily driven by a growing middle-income population and increased household earnings. The domestic air passenger traffic in India for the fiscal year ending March 2024 is estimated to be $154 million, marking a 13% increase year-on-year.

The number of airports in India also doubled from 74 in 2014 to 148 in 2013 shows official government data.

Last week, the National Company Law Tribunal approved the merger of Vistara and Air India. Tata Group has a 51% stake in the airline and the rest is owned by Singapore Airlines. Post-merger, Vistara aims to become the largest international airline out of India, with a domestic market share of around 30%.

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