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The Chief Executive Officer (CEO) of Vistara Airlines, Vinod Kannan, has said that while India's aviation sector is still growing, it faces significant risks from external factors.
The demand for air travel in India is on a positive trajectory, but challenges such as fuel costs and the strength of the U.S. dollar could impact growth.
The industry is closely monitoring fluctuations in oil prices, which have increased over the past year.
Despite these challenges, India is experiencing a surge in air travel, driven by a growing middle-income population. The domestic air passenger traffic is expected to continue growing steadily, according to credit rating agency ICRA.
In recent years, the Indian government has taken significant measures to enhance the aviation sector and improve infrastructure.
Official government data indicates that the number of operational airports in the country has increased from 74 in 2014 to 148 in 2023.
According to Kannan, aviation has always been a crucial driver of India's economic development. He also highlighted the multiplier effect of job creation in the aviation industry, with three or four associated jobs in the ecosystem.
Kannan expressed optimism about further improvements in the sector, stating that the National Company Law Tribunal recently approved the merger of Vistara and Air India, with Tata Group holding a 51% stake in Vistara and Singapore Airlines owning the remaining 49%.
The conglomerate, which has diverse business interests, including IT, steel, and automakers, announced the merger in November 2022.
Following the merger, Singapore Airlines will have a 25.1% stake in Air India.
Kannan stated that the merger would position the combined entity as the largest international airline from India and capture around 30% of the domestic market share, enabling significant expansion for the carrier.
