Business Traveller

20 years of growth: Why India's aviation industry is taking off

Michelle Cohan, CNNUpdated 13th April 2016
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(CNN) — "Indians want to spend money. They're one of the world's biggest spenders today."
That's the explanation Neerja Bhatia, vice president of India Etihad, offers for why India is now the world's fastest-growing aviation sector.
"If you look at the past, an average middle-class family would take one domestic holiday a year," she tells CNN. "Today the trend has changed."
International carriers want in on the action.
In 2013, India's Jet Airways partnered with the UAE's Etihad Airways.
With Jet having the widest domestic network in India, there were suddenly dozens more routes, and tens of thousands of seats, connecting India to the Abu Dhabi hub.
Together, the partnership holds 21% of India's aviation market, meaning about one in five fliers in India board either Jet or Etihad.

20-year transformation

India's airspace hasn't always been so lively or attractive.
The government had a monopoly on national air carriers and strict aviation policies blocked foreign ventures.
That all changed with de-regulation in 1994.
Air India, the country's national carrier, has been carrying the India flag around the world for decades.
But its future is uncertain, with today's runways more competitive than ever.
Low-cost carriers now rule Indian skies, with the likes of Indigo and Spicejet accounting for two thirds of the domestic market.
While most other airlines are removing frills, however, Vistara, a new full-service carrier, is adding them in.

Three-class cabin on domestic

Vistara offers a three-class cabin on short-haul domestic routes: economy, premium economy and business.
It's also experimenting with menus and multi-course meals -- going against current trends for short-haul and domestic travel.
"We should not look at the past so much to decide what we want to do for the future," says Vistara's CEO Phee Teik Yeoh.
"When we came up with the idea of premium economy, many of the industry folks were thinking we went out of our mind.
"But actually we've realized many of the economy passengers would like to trade up again."
While premium economy is common on international carriers, it's rarely seen on domestic flights in India.
Vistara may have overestimated public appetite.
The airline has said it plans to remove two rows of premium economy seating until demand improves.
"We have learned that instead of growing the business-travel class, business class is shrinking," says CEO Phee Teik Yeoh.
"So we are nimble, we learn from lessons.
"We are quick-footed to change course midstream."