Airport media – the runway all clear for gaining high altitude
By M4G Bureau - June 05, 2023
Indian air passenger traffic volume is fast regaining pre-Covid levels and is poised to become the third-largest air passenger market by 2024. Increasing audience levels at the airports augurs well for the airport media business that is set to grow manifold in the coming years.
Asia-Pacific has become a significant hub for the global aviation industry. According to a Modor Intelligence report, “The emerging economies in the region, like India and China, are experiencing a massive surge in their respective civil aviation markets due to an increased demand for air travel. Hence, the revenues from Asia-Pacific are projected to witness a high growth rate during the forecast period.” Figure 1 illustrates the dynamism of aviation markets like India and the neighbouring Asia Pacific region.
Figure 1: Global aviation market: the growth zones
The report alludes to India’s Civil Aviation Ministry’s approval for the construction of 21 greenfield airports in the country, indicating the massive airport infrastructure expansion that is underway in India.
The Indian Brand Equity Fund (IBEF) reports that “India has become the third-largest domestic aviation market in the world and is expected to overtake the UK to become the third-largest air passenger market by 2024. Indian aviation also contributed 5% of the GDP, creating a total of 4 million jobs. In addition to it, there is a US$ 72 billion gross value-added contribution to GDP by this industry.”
IBEF has cited the following as the key factors contributing to the civil aviation growth:
- Higher household income: as the GDP of India grew 8.7% in FY2022 after a contraction of 6.6% during the previous fiscal year, there has been more business travel by professionals and greater leisure travel by individuals due to increasing income groups which drive the consumption pattern in India and primarily based out of urban areas, contributing more to the aviation industry.
- Increased FDI inflows: the inflow of FDI contributes to the better development of the infrastructure of the aviation industry.
- Increased tourist inflows: with the increase in the tourism industry, air travel growth has also increased over the years. in 2021, tourism's foreign exchange earnings (fee) were us$ 8.7 billion compared to us$ 6.958 billion in 2020, registering a growth of 26.4%.
- Development of modern airports with new technologies: modern airports come up with developed infrastructure in terms of speed, capacity, sustainability goals, etc, and hence contribute more to the aviation industry.
- Supporting government policies: The UDAN (Ude desh ka aam nagrik) scheme launched in June 2016 is a case in point.
Pertinent to add that data and analytics specialist on civil aviation Cirium in its report (released in January 2023) on top-performing global airports in 2022 ranked Bengaluru's Kempegowda International Airport and Delhi's Indira Gandhi International (IGI) Airport second and seventh, respectively. Kempegowda International Airport witnessed 84.08 per cent of its 201,897 flights depart on time, and Delhi's IGI Airport witnessed 81.84 per cent of its 411,205 flights depart on time.
Fig 2: Air passenger traffic in India (Sept 2022 – April 2023)
Figure 2 reveals the northbound trajectory of air passenger traffic volume in India, that rose from 24.94 million in September 2022 to 30.92 million in December 2022 before dipping marginally in the months of January and February of 2023. March 2023 saw the volume picking up and reach 31.02 million (the highest in 7 months, but declined marginally to 30.56 million in April 2023.
The trends point to a highly promising business environment being created for airport media operations across the country.