India is a massive country both in area and people.  The combination should give it advantages to grow fast and generate economic progress.  But it hasn’t yet and the new, much praised Prime Minister, has yet to unleash the pent up forces held back by a bureaucracy that is surely the envy of every Soviet apparatchik.

Take a look at the country’s airlines in the following chart.  Some of the airlines, like Kingfisher, have gone.  Overall, the Indian commercial passenger fleet grew from five airlines with 104 aircraft in 2000 to 16 airlines with nearly 400 aircraft.  This is robust growth – but India’s railways still carry more people in one day than its airlines carry in a year.  So it’s not robust enough.

2015-05-06_12-19-07Looking at the passenger fleet by aircraft type, as the next chart shows, provides an idea of how these airlines are developing markets.  In 2000 the fleet was 67% single aisle and 33% twin aisle.  By 2014 the fleet was 73% single aisle, 17% twin aisle along with 7% regional jets plus 3% turboprops.  The much smaller fleet of twin aisles reflects a shrinking of overseas capabilities (Air India falling and external competitors having a field day).  At the same time the growth in regional jets and turboprops (sparse data prior to 2009) makes sense given an opening of domestic air service, many of which depend on rudimentary runways and obviously sparse traffic.   Low GDP is a crucial hurdle to faster growth in air travel.

2015-05-06_12-23-06In terms of the fleet breakdown by OEM, India is not that much different from others.  Its a race between Airbus and Boeing, with leftovers for the rest.  That said, Airbus has had tremendous success growing its customer base.  This has also exposed Airbus to more risk in India and Kingfisher is the poster child for that. However even as Airbus had the Kingfisher bump, it also has IndiGo as a customer and this is the fastest growing Indian airline.  Between 2000 and 2014, IndiGo saw its fleet grow from 6 to 87 aircraft.  The demise of Kingfisher cut back the ATR fleet.

2015-05-06_12-44-05India is not unlike Brazil in that its vast hinterlands should be generating considerable air traffic.  Distances are too great for if time is any factor.  But, as mentioned before, GDP growth is constrained.  We believe India should be big market for turboprops.  India’s fuel taxes favor turboprops.  It is turboprops that should be driving the nation’s air growth – connecting smaller communities to hub cities.

The next chart tracks turboprops in India from 2009.  The failure of Kingfisher impacted the size of the fleet, but look at how few turboprops there are in a country of 1.2 billion people!  One would think the market would be many times this.

2015-05-06_12-51-34Looking at selected countries we can see how important turboprops might be to the development of commercial aviation. In population terms, China and India way under-utilize these aircraft compared with the others shown.  China and India have extensive rail systems that may have an impact.  In GDP terms, we can see that India’s relatively low GDP hampers the ratio – Russia has 50% more commercial turboprops in service and its GDP is 11 times greater.  Brazil’s GDP is only 1.2 times greater than India’s but it has 128 turboprops compared to 44.  Mexico has a well developed inter-city bus system, but it still gets a lot of value from its two dozen turboprops.

2015-05-06_14-14-52It seems that India’s economy could get a boost from further liberalization of its air transport sector.  Which is to say less government interference.  Moreover, allowing communities to develop their own airport facilities could encourage more air travel.  These communities have the most to gain from connecting their local economies to the greater Indian and then the global economy.  Allowing a better flow of people and goods must surely improve the general economic activity level.  Connecting smaller communities with larger ones is likely best done using turboprops.

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