DMPQ: Air India is severely under stressed but aviation sector is not. Identify the potential and challenges? 

Aviation sector is one of the promising sector in India. This sector faced a growth rate of 20%  per annum in passenger traffic. As per IATA, India will become the 3rd largest aviation market in the world interms of passenger by 2026. Above data clearly states that aviation sector is not under stressed.

The opportunities offered by Aviation sector are:

  • Rising purchasing power and disposable income of middle class accompanied by growth in cargo movement.
  • In terms of infrastructure also growth in number of carriers and Greenfield airports are coming. PPP model has been a successful affair.
  • FDI inflows in air transport between April 2000 and March 2017 stood at $ one billion.

But there are some challenges also:

  • Infrastructure is limited to few cities only.
  • Input cost is very high and high quality skilled man power is not available.
  • The taxation policy is also very complex.
  • Dormant airports require renovation and modernisation. Cost is huge.

Solution for aviation sector:

( Tell me in the answer)

 

 

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