Only 0.3 percent of Indians currently travel abroad for a holiday every year, a fraction of the estimated 100 million who could potentially afford to do so, CAPA's analysis of household income shows. Most Indians travel for education, business or to visit friends and relatives.
"If there is any market where low-cost, long-haul can work it is India," CAPA India CEO Kapil Kaul said at an aviation conference in Mumbai on Tuesday, citing its geographic location and a large order pipeline for new long-range narrowbody jets.
Low-cost carriers, launched in the early 2000s, already dominate domestic air travel with a two-thirds market share.
The share of budget airlines in the international market rose to about 23 percent in the fiscal year 2016/17 from 14.5 percent five years earlier, CAPA estimates.
The jets, with longer ranges than predecessors, will enable low-cost carriers to launch non-stop routes to Asian destinations such as Phuket, Manila, Hong Kong, and Hanoi that are otherwise unviable today.
By 2025, Indian budget carriers will operate close to 40 wide-bodied aircraft, which could deliver an additional 2 million annual outbound leisure travellers to places such as New York and Sydney, CAPA said.
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