Indian aviation sector to fly high in 2016

Indian and South East Asian airlines are likely to see improved earning prospects in 2016, primarily driven by higher demand and lower fuel costs. However, the rating agency said the operating environment will be challenging as there is strong competition and capacity expansion. Noting that macro-economic growth should help bolster demand and top-line growth for the region's airlines, Fitch said there has been a strong domestic growth in India. Citing data from the International Air Transport Association (IATA), the agency said revenue passenger- kilometer growth topped 19% year-on-year in India over the first 10 months of 2015, which is seen 12.4% in China, Russia (8.5%) and Brazil (2.3%). "Higher demand, lower fuel costs and ongoing industry restructuring suggest an improving earnings outlook for the Indian and South East Asian airline sectors in 2016," Passenger load factors (PLFs) in India and south-east Asia have risen steadily and improving GDP growth should continue to support it GDP growth in India and most parts of south-east Asia to accelerate next year