India outbound travel market won’t overtake China’s soon: Analyst

India’s aviation industry could also be on a powerful growth path, but don’t expect overseas travel to India to overtake China’s any time soon, aviation analysts say.

Demand for travel to and from India is anticipated to extend because the country’s middle class grows and more residents travel abroad for the primary time, said Brendan Sobie, an independent analyst at Sobie Aviation. But “don’t expect India to turn into a much bigger outbound market than China any time soon.”

The South Asian nation could also be set to overtake China because the world’s most populous country, but there remains to be a “huge gap” between their aviation markets, Sobie said.

“The gap between China and India is big,” Laitya Dhavala, a valuation consultant at travel analytics firm Cirium, told CNBC.

Although India has the third largest aviation market on the planet, “China’s total fleet is nearly five times the scale of India’s existing fleet, with a population almost equal to it,” she said, stressing that it “shows room for expansion.”

In addition, only 7.3% of India’s current population has a passport, Dhavala stressed.

Analysts agree that there’s potential for growth in India’s domestic and international travel market.

Compared to China, India has a better share of young adults, with 40% of the population under 25, Dhavala said. “This generation is on an increasing economic trajectory with a growing desire and appetite to travel and explore the world.”

According to data from statisticspeople under the age of 29 accounted for 34.12% of China’s population in 2021.

China has a rapidly growing aging population. Only 7% of India’s population this yr consisted of adults aged 65 and over, in comparison with 14% in China, data from Pew Research Center showed.

She added that with more women entering the workforce, a dual-income household would give families more freedom to spend.

“India will turn into considered one of these key pillars of world aviation, and the subsequent few years … China.

Prime Minister Narendra Modi’s government has announced it’ll spend $12 billion by 2025 to enhance regional connectivity by constructing recent airports and renovating existing ones, reported Reuters.

On Monday, the federal government announced further infrastructure investments for the aviation sector: increasing the variety of airports, carriers and staff to maintain up with the demand for travel to and from India, which has increased rapidly after the pandemic eased.

“Without infrastructure investment, there’s a risk that there might be a requirement for more flights, but there is not going to be enough infrastructure to handle flights, especially in big cities,” he told Sobie.

The country’s aviation sector is “entering a growth phase,” said Civil Aviation Minister Jyotiraditya Scindia. “We need to construct civil aviation infrastructure and capabilities [so] that we’ll have the opportunity to support India’s $20 trillion economy by 2047.”

“At one point, we did not have passengers to fill [the] airlines as a result of Covid. Now we haven’t got enough aircraft to hold our passengers,” Scindia said on the CAPA India Aviation Summit in New Delhi earlier this week.

India, the so-called fastest growing economy on the planet based on the World Economic Forumwas welcoming 410,000 passengers a day in 2019 before Covid hit – but has hit a recent record of 456,000 passengers in recent months, claims Scindia.

He said that although the height season in October has passed, airports still receive between 420,000 and 440,000 passengers a day.

Scindia added that passenger capability on the country’s six major airports is anticipated to extend to 420 million over 4 years from the present 192 million.

In anticipation of an influx of passengers in the approaching yr, each domestically and internationally, national carrier Air India announced in February that it might buy 470 Boeing and Airbus aircraft in a call Scindia called “the most important order within the history of international civil aviation”.

This was announced at the tip of last yr by the Indian conglomerate Tata Group Vistara will merge with the national carrier Air India until March 2024. Vistara is a three way partnership between Tata Sons and singapore airlines. After the merger, SIA will own 25.1% of Air India.

“The opportunity for Indian aviation is big… the expansion opportunity could be very, very real,” Wilson of Air India said on Monday, adding that India’s flag carrier is specializing in international growth to meet up with its competitors.

Indian airlines proceed to largely concentrate on domestic operations, with only 8% of major airlines offering international routes, Cirium’s Dhavala said.

However, she said she was optimistic that the federal government was looking beyond its borders because the country was set to turn into “a regional hub, not [having flights] flowing through the Middle East or Europe.

The total fleet of Indian carriers is anticipated to double in the subsequent five to 10 years, translating to a 15% increase over the subsequent 8 years, noted Dhavala.

“If we will offer an uninterrupted offering that’s great quality, great service, [and flies] without connecting to where Indian travelers or people traveling to India wish to go, the chances are persistently greater than it seemed up to now,” said Wilson.