Mumbai, Jan 31 : The central government's initiatives like the regional air connectivity "Udan" scheme should be favourable for demand growth and competition, Fitch Ratings said on Tuesday.
According to Fitch Ratings, government decisions in the previous two years "further underscore India's market changes and should be favourable for demand growth and competition".
"..These include easing regulatory requirements to begin international operations; divestment of the government's stake in Air India; and implementation of a regional connectivity scheme to increase air travel access," it said in a report.
As per the report, Indian airlines' aircraft order book is the third-largest globally, after the US and China.
"The large order book presents "medium-term overcapacity risk, despite robust demand growth, which could pressure yields and profitability," it said.