The Indian aviation industry is potentially in the sweetest spot led by strong domestic demand, along with accommodative government policy and a benign fuel outlook.
The domestic air traffic, which grew at a compounded annual growth rate of 20 percent in the last three years, is expected to maintain the same growth trajectory in the coming five years
Governments intention to make flying affordable and convenient through its new Regional Connectivity Scheme UDAN, and weak fuel prices due to global crude surplus is further going to boost the fortunes of airline companies.
UDAN aims to fly new 300 million domestic passengers annually by 2022 and 500 million by 2027. Aviation turbine fuel prices have corrected 40 percent in the last three years and will remain weak due to rising supplies from the U.S.
The above factors would help aviation companies to get discounts from Government along with increase in customer share due to regional connectivity. In addition the icing on the cake is low turbine fuel prices.