Month to month economic and industry data can fluctuate, which is why we look at the data over a longer term. While passenger air traffic spiked in February, we see the annual growth rate of more than 20% over the last several years reflecting the growing economy and rising disposable income that are drivers of our Rise of the New Middle Class investing theme. In addition to incremental spending on travel, other areas benefitting from this theme include leisure spending, housing and furnishings, premium branded apparel, higher end autos, restaurants and connected devices. In short, those devices and activities that denote some degree of status have been achieved.
Even though Goldman Sachs (GS) lowered its real gross domestic product (GDP) forecast on India for the year to March 2019 to 7.6% from 8%, the level of growth is far stronger than anything expected in the US, a country that sees more signs of our Middle-Class Squeeze investing theme.
Passenger air traffic in India grew at the fastest pace in 13 months in February, even as fears mount over demand weakening due to rising air fares.
The number of passengers flown last month jumped almost 24% on-year to 10.7 million, according to government data.Air travel in India traditionally records a spurt from October through March, rebounding from a lean period in the previous months.
The country’s air travel has grown at an annual pace of more than 20% in the past few years as rising incomes and the advent of no-frills carriers prompted more people to shun trains for long-distance travel.
The south Asian nation is already the third-largest aviation market behind the U.S. and China with domestic traffic of more than 100 million passengers.