Indian Airlines to expand international presence, likely to garner 50% market share by 2028: Crisil report

Indian airlines have been proactive in expanding their international routes, adding 55 new routes in the past 15 months alone. (Pixabay)

The credit rating agency Crisil in a statement on Monday (May 6) stated that the Indian airlines are set to significantly bolster their share in the country’s international passenger traffic, with estimates suggesting a surge of 700 basis points to around 50% by fiscal year 2028, up from 43% in fiscal year 2024.

Indian airlines are expected to achieve a compound annual growth rate (CAGR) of 14-15 per cent in the international segment over the next four fiscal years, further solidifying their position in the market.

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According to the report, this substantial increase is expected to be driven by several factors, including the addition of fleet capacity, the introduction of new routes, and the operation of direct flights to key destinations.

Rebounding international passenger traffic

As India’s international passenger traffic rebounds from the pandemic-induced downturn, reaching around 70 million in fiscal year 2024 from a low of 10 million in fiscal year 2021, Indian airlines are strategically positioning themselves to capitalize on this growth trend.

Manish Gupta, Senior Director and Deputy Chief Ratings Officer at CRISIL Ratings highlighted that there has been a notable shift in spending patterns post-pandemic, with an increasing inclination towards international leisure travel. He said, “Increasing disposable incomes, easing visa requirements, growing number of airports and enhanced air travel connectivity are boosting international travel.”

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“The government’s focus on making India a hub for tourism is also expected to provide a fillip to inbound traffic. Thus, international passenger traffic is likely to clock a CAGR of 10-11% over the next four fiscals, against a mere 5% CAGR in the four years prior to the pandemic,” he added.

Indian airlines expanding international wings 

Indian airlines have been proactive in expanding their international routes, adding 55 new routes in the past 15 months alone. These routes include direct flights from additional cities to popular destinations in the United States, Europe, and Australia, reducing flying time and eliminating layovers.

Furthermore, Indian carriers are leveraging codeshare agreements with major global airlines to offer onward connectivity to passengers, enhancing their competitiveness in the international market.

The report further highlights that Indian airlines have natural advantages over foreign carriers, including superior domestic connectivity and the ability to offer end-to-end international connectivity on a single ticket to travelers from Tier 2 and Tier 3 cities.