13/01/2025
On November 17, 2024, Indian aviation achieved a historic milestone, with domestic airlines carrying over 5 lakh passengers in a single day for the first time ever. A total of 5,05,412 passengers were transported across 3,173 domestic departures, underscoring the immense growth and resilience of the sector. Major scheduled carriers reported occupancy rates exceeding 90%, demonstrating strong demand for air travel. However, challenges persisted in On-Time Performance (OTP). IndiGo recorded the best OTP at 74.2%, followed by Alliance Air (71%) and Akasa Air (67.6%). SpiceJet and Air India lagged behind, with OTPs of 66.1% and 57.1%, respectively.
During the Diwali festivities in October 2024, Mumbai’s Chhatrapati Shivaji Maharaj International Airport (CSMIA) experienced a notable surge, handling over 4.42 million travellers. This uptick reflects the growing appetite for air travel among Indian consumers, driven by festivals and robust economic activity. Looking ahead, the Civil Aviation Secretary, Vumlunmang Vualnam, highlighted the immense potential of India’s aviation sector. The domestic fleet size is projected to expand to 1,400 aircraft within five years, while the number of airports has more than doubled in the past decade, rising from 74 to 157. Passenger volumes have also doubled during this time, from 11 crore to 22 crore annually.
India is expected to see 12.7% growth in overall airline seat capacity in 2024 compared to pre-pandemic levels in 2019, making it the fifth fastest-growing market globally in terms of seat capacity among the top 20 nations. For 2024 alone, India’s seat capacity is projected to grow 8% year-on-year, ranking it seventh globally. Despite this growth, countries like Saudi Arabia (11.7%) and the UAE (10.5%) have shown higher rates of expansion. However, serious challenges persist, particularly for leading carriers like IndiGo. The airline has about 70 aircraft grounded due to delays in receiving parts from Pratt & Whitney, resulting in a daily capacity loss of over 68,000 seats. Globally, seat capacity recovery in 2024 remains modest, at 2.4% above 2019 levels, with year-on-year growth at 6.6%.
India’s aviation market is witnessing significant expansion, with Akasa Air placing an order for 150 Boeing 737 Max aircraft in January 2024 and Air India ordering 85 more planes from Airbus in October. Currently, the Air India Group and IndiGo dominate over 90% of the domestic passenger market. Despite record-breaking domestic travel, airlines face financial pressures due to rising costs and intensifying competition. For instance, IndiGo’s yield per passenger fell to ₹4.55 per kilometre in the seasonally weaker September quarter, down from ₹5.24 in the June quarter, as the airline resorted to discounts to attract customers.
While the aviation industry is enjoying record passenger volumes, profitability is being challenged by increased competition, capacity expansion, and operational costs. The July-September revenues of IndiGo, India’s largest carrier, hint at potential pressure on bottom lines despite robust demand. As India’s aviation sector continues to grow, balancing expansion with financial sustainability will be critical in maintaining this upward trajectory.