India Emerged As The Fastest Growing Passenger Market

India’s domestic airline capacity has skyrocketed by 100% in the past decade, propelling it to the third spot in the global passenger market, just behind the USA and China. In 2014, India’s passenger capacity stood at 8 million, but by April 2024, it had surged to 15.5 million, marking India as the world’s fastest-growing airline market in the last ten years. 

India’s growth rate has been a robust 6.9% annually, edging out China’s 6.3%. In comparison, the USA grew at a rate of 2.4%, Indonesia at 1.1 %, and Brazil experienced an annual decline of 0.8%. This competitive edge in growth rate underscores India’s potential for sustained growth in the aviation industry.

Key Drivers Of Growth

According to the Business Standard, “India’s transition to low-cost carriers (LCCs) has been the sharpest among the top five. In April 2024, LCCs accounted for 78.4 per cent of Indian domestic capacity, followed by Indonesia at 68.4 per cent, Brazil at 62.4 per cent, the US at 36.7 per cent, and China at 13.2 per cent.

Also read, Sachs Predicts India’s GDP Growth To Soar At 6.7%

Among all LCC companies, Indigo has been the major driver of growth. Since 2014, the company’s market share has nearly doubled from  32% to 62%. Furthermore, the rest of the market witnessed a seat growth of 0.7% per annum, whereas Indigo witnessed an average growth of 13.9% annually. 

Challenges & Future Outlook

As per the report of Ch-Aviation, “96 per cent of IndiGo’s orders for 982 planes are for narrow-bodied aircraft, while 74% of the 447 aircraft ordered by Air India are narrow-bodied.” This might seem to be a good number, but the question is, is India ready for this type of growth? India currently has 190 airports, contrary to its rival China, which has 250 airports and the USA, which has 656 airports. 

Further, Indigo projected that the number of domestic passengers will grow by more than 100% in the next 6 years, from  155 million to 350 million. Looking at these stats, the future outlook for the passenger market in India seems quite optimistic; however, the success of this prediction depends on the steps taken by the Civil Aviation Ministry to mitigate this challenge.

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