Indian airlines are set to ascend in the global market, seizing a substantial share of traveler traffic in the coming years, according to a report by CRISIL Evaluations. The statement forecasts that by fiscal year 2028 (FY28), Indian airlines will clutch nearly half (50%) of the Indian global passenger traffic market, a considerable increase from their present share of 43% (FY24). This substantial increase is credited to several influences, including fleet growth and new routes. Indian carriers are tactically adding new aircraft to their fleets and initiating new global routes, providing more choices for travelers. Passengers can also now appreciate the ease of direct flights to key global destinations, removing layovers and reducing travel time.
Indian airlines claim a broader domestic link compared to foreign players. This permits them to offer continuous connections for voyagers from smaller Indian cities to global destinations on a solitary ticket. India’s geographical location makes it a possible hub for linking travelers between Europe, the Middle East, and Africa (EMEA) with the Asia Pacific region.
India’s international passenger traffic increased to about 70 million in fiscal 2024, from 10 million in the pandemic-hit fiscal 2021, to exceed the pre-pandemic level of 67 million travelers in fiscal 2020. The portion of Indian airlines, which was growing gradually earlier, picked up stride since the pandemic.
The report indicates a rising trend in international vacation travel by Indians, powered by influences like rising disposable proceeds, simpler visa procedures, and a cumulative number of active airports. This rush in international passenger traffic, assessed at a Compound Annual Growth Rate (CAGR) of 10-11% over the next four years, presents a profitable opening for Indian airlines.
The government’s effort to make India a center for tourism is also anticipated to deliver a boost to inbound traffic. Therefore, international passenger traffic is expected to clock a CAGR2 of 10-11% over the following four fiscals, compared to a mere 5% CAGR in the 4 years before the pandemic, said Manish Gupta, Senior Director and Deputy Chief Ratings Officer, CRISIL Ratings.
Indian airlines are looking to seize a large share of the progress in global passenger traffic as it is characteristically more profitable due to higher profits and has less forceful rivalry compared with domestic routes. They have included 55 new international routes over the previous 15 months, taking their count beyond 3004. These consist of direct flights initiating from additional cities to common long-haul destinations in the United States, Europe, and Australia, successfully reducing flying time and removing layovers.
Indian carriers are also targeting to organize additional aircraft on short- and medium-haul international paths and leveraging codeshare arrangements with major universal airlines to offer forward connectivity to passengers.
To capitalize on the development in international travel, Indian carriers are capitalizing on widebody and long-range narrowbody airplanes for network growth, adding new international routes, and presenting long-haul non-stop flights to main destinations. Assisted by the planned fleet addition and network development strategy, Indian airlines can log a CAGR of 14-15% in the international section over the next four fiscals, winning their market share to 50%, said Ankit Kedia, Director, CRISIL Ratings.
The progress in domestic traffic is anticipated at 10-11% over the same period. Quicker growth in the more profitable international section will reinforce the business profiles of Indian airlines. That said, an economic slowdown affecting flexible air travel and higher-than-anticipated competition from foreign airlines can interrupt the gain in market share by Indian carriers and, thus, will bear watching. As such, Indian carriers have certain natural advantages in cornering a greater share of the country’s global traffic compared with foreign airlines.
