DOMESTIC AVIATION MARKET ANALYSIS

Currency fluctuations have significantly restrained the growth of the global domestic aviation market in recent years. The volatility in currency exchange rates introduces additional risks and uncertainties for airlines as well as passengers. For airlines, fuel costs which constitute a major portion of operating expenses are globally priced in US dollars. When the domestic currency depreciates against the US dollar, it leads to higher fuel costs for airlines. This eats into the margins of airlines and forces them to either cut down operations or increase fares. Both of these actions negatively impact the demand for air travel.

Market Opportunities: Emergence of new routes

The emergence of new routes presents a significant opportunity for growth in the global domestic aviation market. As economies continue to develop across regions and populations become increasingly mobile, demand for connectivity within and between countries will only increase.

One of the ways this demand can be met is through the establishment of new domestic air routes. Opening direct flights between cities that previously had poor or no air linkages can open up enormous economic benefits. It allows for easier movement of people whether for work, education or tourism. Industries become less constrained by limitations of transport infrastructure. New routes also facilitate the expansion of regional supply chains and clustering of industries.