India's Airline Losses to Widen Despite Passenger Surge

06 Jun 2024 CW Team

Losses for India's airline industry are anticipated to increase to between $400 million and $600 million in fiscal 2025 as rising costs overshadow the growth in passenger demand, according to a report from leading aviation consultancy CAPA India released on Wednesday.

CAPA India projected losses for fiscal 2024 at $300 million to $400 million. The consultancy also forecasts a 1% rise in yields?the average fare per passenger per kilometer?for the current year.

However, airline costs are expected to increase by 3.8% in fiscal 2025, further straining the industry. Despite these financial challenges, India's aviation market remains the fastest-growing globally, with demand exceeding the available supply of aircraft.

The Indian airline market is primarily dominated by low-cost carrier IndiGo, which holds a 60% market share. The Air India group, which includes two budget airlines and two full-service carriers, accounts for roughly 30% of the market. Other key players include the new low-cost carrier Akasa Air and SpiceJet.

CAPA India also estimated that domestic passenger traffic will grow from approximately 154 million to between 161 million and 164 million. International passenger traffic is expected to rise to between 75 million and 78 million.

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