DOMESTIC AVIATION MARKET ANALYSIS

Domestic Aviation Market Size and Trends

The Global Domestic Aviation Market is estimated to be valued at US$ 922.12 Bn in 2024 and is expected to reach US$ 1,202.31 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 3.9% from 2024 to 2031.

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The growth of the domestic air travel will be driven by increasing disposable income, expansion of middle-class population, and growing urbanization in emerging economies across Asia and Africa. Lower pricing enabled by no-frills carriers has made air travel much more affordable for the masses. This augurs well for passenger traffic growth expectations. While factors like economic uncertainties, high oil prices and geopolitical issues may pose challenges, overall, more liberal aviation policies coupled with developing airport infrastructure across many countries are likely to boost connectivity and intra-regional air travel volumes over the long run. The growing preference for fast, affordable and convenient air travel is projected to support the industry's upward trajectory over the forecast period.

Rising middle class in emerging economies

The growth of the middle-class population in emerging economies across Asia, Africa, and Latin America has boosted domestic air travel demand in recent years. Countries such as India, Indonesia, Brazil have witnessed strong economic growth over the past decade which has lifted millions out of poverty and into the middle-income groups. These individuals now have greater disposable incomes to spend on goods and services that were beyond their reach earlier. Domestic air travel is one such service that has become accessible to more people in these nations.

The burgeoning middle class in large emerging countries see aviation as an aspirational mode of transport. They now prefer short haul flights within their domestic borders to save travel time as compared to road or rail journeys. This is evident from the traffic numbers of low-cost carriers that have proliferated within these markets. They offer affordable fares targeted at price-sensitive customers. The appeal of air travel comes from both - its convenience and ability to flaunt economic prosperity. Consumer trends indicate people allocate more share of their budgets to experiences and leisure activities as living standards improve. Domestic flights enable them to visit family across states or spend weekends in popular tourist destinations within their own large and diverse countries.

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Urbanization and growth of secondary cities

Rapid urbanization has been a major driver for the growth of the domestic aviation sector globally. Over the past few decades, large numbers of people have migrated from rural areas to cities in search of better livelihood opportunities and amenities offered in urban centers.  As a result, more than half the world's population now resides in cities, and this urban population continues to swell rapidly.  Many nations have also actively promoted policies to encourage urban development beyond primary metropolitan regions, in order to decongest major cities and promote balanced regional growth.  This has led to the emergence and rise of several new secondary cities and smaller towns, particularly in developing nations.

The rise of secondary cities has created new market opportunities for airlines to expand their domestic route networks and tap into previously underserved travel demand. Point-to-point air travel between these emerging urban centers and larger cities has surged, as passengers opt for the convenience and speed of flying over lengthy surface transport journeys. Airlines have rapidly launched new routes to capitalize on this fresh market potential.

Investments to develop and modernize airports in secondary cities aim to provide efficient air connectivity to drive their economic growth and integration with national and global markets. Improved air access is seen as a key enabler to attract investment, create jobs and boost tourism in these fast-growing urban regions.