Indian airlines share to surge to 50% in international passenger traffic by FY28: CRISIL

Indian airlines are poised to dominate the country's international air passenger traffic, with CRISIL forecasting their share to surge to 50% by the fiscal year 2027-28. This is up from 43% in the previous fiscal.

Market share to surge

This significant increase is attributed to Indian carriers' expansion plans, including deploying more aircraft, opening new routes, and leveraging their strong domestic connectivity compared to foreign competitors.

CRISIL predicts that the business profiles of Indian airlines will strengthen as they capture a larger share of the more profitable international traffic. The shift towards international leisure travel post-pandemic, driven by increasing disposable incomes and eased visa requirements, has contributed to this growth. Additionally, government initiatives to boost tourism are expected to further stimulate inbound traffic.

International passenger traffic in India has rebounded strongly, reaching around 70 million in fiscal year 2024 from a low of 10 million during the pandemic-hit fiscal year 2021. This resurgence has accelerated the upward trajectory of Indian carriers' market share.

Indian airlines have strategically added 55 new international routes in the past 15 months, surpassing 300 routes in total. These expansions include direct flights from additional cities to popular destinations in the United States, Europe, and Australia, reducing travel time and layovers.

Furthermore, Indian carriers are enhancing short- and medium-haul international routes and forming codeshare agreements with global airlines to offer seamless connectivity to passengers. CRISIL highlights the inherent advantages of Indian airlines, such as superior domestic connectivity and the ability to serve tier 2 and tier 3 cities with end-to-end international connections.

"A noticeable shift in spending patterns has emerged after the pandemic, as evident in the increasing inclination of Indians towards international leisure travel. "Increasing disposable incomes, easing visa requirements, growing number of airports and enhanced air travel connectivity are boosting international travel," said Manish Gupta, Senior Director and Deputy Chief Ratings Officer at CRISIL Ratings.

India's geographic location also positions it as a potential hub for international travel between the Europe, Middle East, Africa (EMEA), and Asia Pacific regions.

"To capitalise on the growth in international travel, Indian airlines are investing in widebody and long-range narrow body aircraft for network expansion, adding new international routes and introducing long-haul non-stop flights to key destinations, " said Ankit Kedia, Director, CRISIL Ratings.

To capitalize on the growing demand for international travel, Indian airlines are investing in widebody and long-range narrow-body aircraft, expanding their network, and introducing long-haul non-stop flights. CRISIL projects a compound annual growth rate (CAGR) of 14-15% in the international segment over the next four fiscal years, culminating in a 50% market share for Indian airlines by 2027-28.

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