A leading aviation consultancy revealed on Wednesday that India's airline industry's anticipated losses are poised to expand significantly, ranging between $400 million and $600 million for fiscal year 2025. This projection comes despite an expected increase in passenger demand, as heightened costs are projected to outweigh any potential revenue gains.
For fiscal year 2024, CAPA India estimated losses in the range of $300 million to $400 million. Furthermore, the consultancy anticipates a modest uptick of approximately 1 per cent in yields, representing the average amount a passenger paid to fly one kilometre, for the current year.
The consultancy further added that it anticipates a notable increase of 3.8 per cent in overall airline costs for the fiscal year 2025. Despite infrastructure constraints, India is currently the world's fastest-growing aviation market, characterised by demand that outpaces the available supply of jets.
In India, the aviation landscape is primarily shaped by low-cost carrier IndiGo, which commands a significant 60 per cent share of the market. Meanwhile, the Air India group, encompassing two budget airlines and two full-service carriers, including Air India and Vistara, collectively holds approximately 30 per cent of the market share. Among the major airlines, Akasa Air, a newcomer in the low-cost carrier segment, and SpiceJet stand as significant players in the industry.
According to estimates provided by CAPA India, domestic passenger traffic is projected to experience an increase, potentially reaching a range of 161 million to 164 million, up from the current figure of approximately 154 million. Additionally, the consultancy forecasts a growth in international traffic, with numbers expected to rise to a range of 75 million to 78 million.
Meanwhile, the Indian aviation industry has recently faced some challenges. Recently, Tata-owned Air India experienced sudden operational difficulties after its staff took a mass sick leave due to extended working hours, which the company later resolved.