Indian airlines aim to cross 50% international market share mark in 2025

International air passenger traffic.

Airlines including IndiGo, Air India and Akasa Air are all betting on expansion of their international operations for profitability and growth in 2026 and beyond, with all domestic airlines collectively looking to increase their market share in the international segment beyond the 50 percent mark in 2025, multiple executives from all three airlines told Moneycontrol.

While IndiGo has internally set a target to cross 15 million international ticket sales in 2025, Air India is eyeing around 20 million international passengers in 2025, senior executives from both airlines said.

"Air India carried around 17.5 million international passengers in 2025, including both passengers flying into India and from India to international destinations. The target for 2025 is a high teens growth on the international side to cross the 20 million mark," a senior executive from Air India told Moneycontrol on condition of anonymity.

He added that Air India's fleet expansion, where the airline is likely to get delivery of close to 60 planes in 2025, will help the airline boost its international flights and destinations.

Last month, Air India's Chief Commercial and Transformation Officer, Nipun Aggarwal, told Moneycontrol that the airline plans to boost its international presence by optimising its fleet and network to connect passengers travelling to South-East Asia, Europe and the Americas over the next three to five years, as part of its growth strategy and profitability blueprint.

Similarly, IndiGo, which signed a lease agreement with Norway-based Norse Atlantic Airways last week for a Boeing 787-9 Dreamliner to boost its international expansion, is gearing up for faster international expansion in 2025 and intends to launch international flights to an additional 20 destinations in 2025.

"The depreciation of the India Rupee coupled with IndiGo adding aircraft to its fleet faster than most carriers in the world, gives the airline the perfect opportunity to expand in the international market," a senior official from the airline told Moneycontrol.

In 2024 the airline launched or restarted flights on 24 international routes with 292 weekly flights.

The executive added that the airline also expects India's domestic market to see steady growth over the next few years, but the pace of market expansion of India's domestic air traffic is expected to taper for a few years until new airport infrastructure is developed over the next few years.

"India's Tier-II and Tier-III air traffic market will drive the growth of the overall domestic market for the next few years and with the Central government spending a large amount of capital expenditure on the developments of highways and railways, there may be some stagnation of growth of the aviation market until new airport infrastructure is created," the executive said.

IndiGo is also likely to take delivery of its first Airbus A321XLR aircraft, the longest-range single-aisle aircraft in the world by June 2025, which will allow the airline to fly directly to western European and far-eastern countries from India.

The new aircraft will help IndiGo operate nonstop flights of up to 4,700 nautical miles or 8,700 km, which will help the airline fly directly from Indian airports to London, Amsterdam, Paris, Tokyo and Perth. The planes in the airline's current fleet, mainly A320ceo, A320neo, A321neo and ATR aircraft, can fly a maximum of 7,200 km without refuelling.

Last month, IndiGo's Chief Executive Officer, Pieter Elbers, had highlighted that IndiGo will launch flights to three more international destinations in the next few months to increase its international offering to 40 by the end of 2024-25. Speaking at a post earnings conference call, Elbers also said that IndiGo's newly launched loyalty programme will help the airline garner a higher market share of international customers.

IndiGo has received approvals from the governments of India and Kyrgyzstan and is expected to launch a daily service between Indira Gandhi International Airport in Delhi and Manas International Airport in Bishkek, Kyrgyzstan, from February 15, 2025.

Elbers further said that international expansions account for 28 percent of all available seat kilometers (ASK), a measure of an aeroplane’s carrying capacity available to generate revenues. Around 10 percent of IndiGo's revenues also come from its international operations.

An analysis of airline-wise international passenger traffic data from the Directorate General of Civil Aviation (DGCA) for the first three quarters of 2024 shows that Indian carriers accounted for an all-time high of 45.6 percent market carrying around 24.2 million passengers, when compared to 20.68 million passengers carried in the same period in 2023.

Credit ratings agency CRISIL had last year pointed out that it expects half of India's international air passenger traffic to be catered to by Indian operators by financial year 2027-28.

The share of Indian airline operators in international passenger traffic, including originating or terminating as well as the traffic transitioning through the country, is seen surging 700 basis points to around 50 per cent by 2027-28, from 43 per cent in the previous fiscal, the rating agency had said last year.

The improvement would be driven by domestic airlines deploying additional aircraft and adding new routes in the international segment, as well as their inherent advantage of superior domestic connectivity compared with foreign carriers, CRISIL Ratings said in its report.

"Increasing disposable incomes, easing visa requirements, growing number of airports and enhanced air travel connectivity are boosting international travel," Manish Gupta, Senior Director and Deputy Chief Ratings Officer at CRISIL Ratings had said.

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 compound annual growth rate (CAGR) of 10-11 per cent over the next four fiscals, against a mere 5 per cent CAGR in the four years prior to the pandemic, Gupta added.