Domestic airlines are likely to widen losses to $400 million-$600 million in FY25 despite a likely rise in traffic, aviation consulting agency CAPA India chief executive officer Kapil Kaul said on June 5.
In FY24, the Indian aviation sector’s estimated losses stood at $300- $400 million, supported by market leader IndiGo's record profit. The number excludes those of cash-strapped SpiceJet, which is yet to declare results for the last two quarters.
InterGlobe Aviation Ltd, which operates IndiGo, reported a profit of Rs 1,894.8 crore for the January- March period of FY24, the sixth straight quarter of gains.
The aviation industry was on the road to recovery, as the domestic traffic and cargo volumes reached pre-Covid levels in the previous year, Kaul said.
The domestic traffic was likely to grow at 6-8 percent in FY25 over the previous year and international traffic at 9-11 percent. Domestic fares rose 1.3 percent in FY24 from the previous year and were 34 percent higher compared to FY20, Kaul said, while speaking at the CAPA India Aviation Summit.
Airline costs, however, are expected to rise 3.8 percent in FY25 .
India’s airlines are expected to add 84 aircraft this year, taking the fleet count to 812 by the end of FY25 from 728 in the previous year. The fleet size would double by 2030, he said.
The CAPA India CEO expects 25 more airports to be privatised during the next financial year, coupled with an investment of $4 billion by the Airports Authority of India in the next two years to better the airport infrastructure.
He also urged to the government to improve the standards of aviation regulator Directorate General of Civil Aviation (DGCA) and Bureau of Civil Aviation Security (BCAS) to provide impetus to the industry.
India is the world's fastest-growing aviation market with demand from airplanes surpassing supply.
Kaul also highlighted that shortage of pilots will continue to be a concern for Indian aviation in the near future.
"Pilot Shortage is a key shortcoming of the Indian industry in FY25 and with the new FDTL (flight duty time limitations) norms likely to be imposed soon the pilot shortage will be even more severe," Kaul said.
In the last year, Air India, Akasa Air, Vistara and Air India Express have all faced pilot rostering issues due to FDTL norms with all airlines being forced to cancel flights due to protest and agitations by employees.
In its outlook for FY2024-25, Capa India said domestic air traffic is projected to rise 6-8 per cent to 161-164 million and international traffic by 9-11 percent to 75-78 million.
With agency inputs
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