HYDERABAD: The Indian aviation industry is likely to remain depressed through 2012 owing to rising fuel costs, European debt crisis and the global economic downturn, according to Ajit Singh Union Minister for Civil Aviation.
“The skies are not expected to clear any time soon and 2012 could prove to be equally challenging. The aviation industry too felt the tremors and the cargo markets worldwide have contracted by 0.7 per cent,” he said.
According to estimates, domestic fuel prices for air carriers are 50 percent higher than the world average.
Delivering the inaugural address at the third edition of India Aviation 2012, organised jointly by FICCI and the Ministry of Civil Aviation, here on Wednesday, Ajit Singh said growth in demand lagged behind the increase in capacity for both passenger and cargo segments, putting downward pressure on load factors and yields.
He added that the European airlines are likely to be the worst hit in 2012, while Asia, mainly India and China, would provide the much needed boost to the sector. “By 2015, Asia-Pacific is expected to account for 37 percent of the passenger traffic, while traffic linked to Europe and North America will fall to 29 percent,” he said.
Indian domestic passengers increased to 60 million in 2011 from 13 million a decade ago and the number is expected to grow by about 10 percent to make India the fastest growing civil aviation market.