The domestic aviation market involves air travel within a particular country. It facilitates transportation within a nation by providing air connectivity between various major and minor cities. Key products in this market include commercial airplanes used by domestic airlines for passenger travel as well as cargo transportation within national boundaries. With growing urbanization and improving economic conditions in emerging countries, the demand for reliable and quick mode of domestic transportation has increased rapidly.
Market Opportunity:
Government focus on infrastructure development across domestic airports presents a major market opportunity in the coming years. Many developing countries lack adequate air connectivity within their territories due lack of infrastructure such as airports, runways and terminals. However, governments are now investing heavily in building new airports as well as expanding and modernizing existing domestic airport infrastructure. Such infrastructure projects will boost domestic aviation by facilitating establishment of new air routes, increasing flight frequencies on busy routes and generally promoting growth of the domestic civil aviation industry. Increased airport infrastructure will attract more domestic airlines to start new services as well as expand operations. This is expected to drive significant demand for commercial aircraft, avionics, components and aftermarket services during the forecast period.
Porter's Analysis
Threat of new entrants: The domestic aviation market has moderate threat from new entrants due to high capital requirements and economies of scale. However, low-cost carriers face low barriers.
Bargaining power of buyers: Buyers have moderate bargaining power due to availability of competitive options and price sensitivity.
Bargaining power of suppliers: Aircraft manufacturers and engine suppliers have significant bargaining power due to high switching costs and scarcity.
Threat of new substitutes: Threat from substitutes like high-speed rail and video conferencing is limited due to convenience of air travel.
Competitive rivalry: Intense rivalry exists among existing players to gain market share through competitive fares and improved services.
SWOT Analysis
Strength: Established brand names, fleet size and networks of major players. Low-cost carriers offer affordable fares.
Weakness: Vulnerable to macroeconomic fluctuations, cyber threats, and pandemic disruptions. High fixed costs and dependence on fuel prices.
Opportunity: Untapped regional connectivity, rising incomes and tourism.
Threats: Infrastructure constraints, security issues, and stringent emission norms add operating pressures.
Key Takeaways
The Global Domestic Aviation Market Size in India is expected to witness high growth led by increasing disposable incomes, emergence of low-cost carriers, and expansion of regional routes. India has become the third largest domestic aviation market globally and is projected to overtake Japan by 2023.
ASEAN countries dominate the regional domestic aviation market led by Thailand, Indonesia and Philippines on account of economic growth, rising middle class, and initiation of low-cost long haul flights. Singapore Airlines, AirAsia and Lion Air have established strong regional networks.
Key players operating in the domestic aviation market are Singapore Airlines, Air New Zealand, Qantas, Qatar Airways, Virgin Australia, Emirates, All Nippon Airways, EVA Air, American Airline, Spicejet, The Boeing Company, Airbus SE, Lockheed Martin Corporation, Textron Inc, and Embraer S.A. Major players are strengthening their fleets with latest fuel-efficient aircraft to expand networks and frequencies.
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