India fast emerging as a key global aviation market, says IATA report

Airline companies anticipate that a rapid rise in middle class incomes and a corresponding change in spending habits mated with lucrative offers from airlines could make India the fastest-growing aviation market for years to come.

A revival in domestic travel to the pre-pandemic level has propelled India to the big league of major aviation markets, trade body International Air Transport Association (IATA) has found.

Domestic travel in India missed the pre-Covid level by 2.2 percent in February 2023 in terms passenger revenue kilometres (PRK), the study said.

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The growth in domestic travel is also seen in the Passenger Load Factor(PLF), which studies how efficiently an airline fills seats and generates revenue. India is the top domestic market in terms of PLF when compared to countries such as the US, China and Japan, it said.

India recorded PLFs of 81.6 percent in February, 85.2 percent in January, 88.9 percent in December 2022, and 87.9 percent in November 2022.
Domestic air passenger traffic for all markets measured for February surged 25.2 percent over the year-ago period. Total February 2023 domestic traffic was at 97.2 percent of the February 2019 level.

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The report estimated that nearly 35 to 40 million Indians travel by air every year. According to World Bank, pre-Covid India had about 168 million air transport passengers, with many of them repeat flyers.

Airline companies anticipate that a rapid rise in middle class incomes and a corresponding change in spending habits mated with lucrative offers from airlines could make India the fastest-growing aviation market for years to come.

Swiss airline intelligence provider, ch-aviation reported in March that French Finance Minister Bruno Le Maire said that IndiGo Airlines could
announce an order for "several hundred" Airbus aircraft at the Paris Air Show to be held at Paris Le Bourget Airport in June.

IndiGo, which is the largest airline in India in terms of its fleet, has over 300 aircraft and currently provides over 35 percent of all the available seat kilometres on flights in and out of Indian airports. IndiGo provides almost 48 percent of all flights across India's international and domestic markets, the report said.

International airlines too are eyeing the growth potential of the Indian aviation market. Wizz Air, a 20-year-old budget carrier from Hungary, is one of them.

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In an interview on April 28, Wizz Air Holdings CEO Jozsef Varadi said India is a growing opportunity. "There’s great potential in India, as the country has seen immense development. I think it may help Europe tackle its employment issues, while its emerging middle class will boost tourism. We’re looking into opportunities there, but this is more a medium-term issue," Varadi said in Budapest.

Etihad Airways  is another airline that is planning to expand its presence in the Indian aviation market.

In an interview with Reuters published on April 27,Etihad Airways CEO Antonoaldo Neves said: "Etihad has India as a priority.” He added that the country is among its top three markets. Etihad, which flies to places like Delhi and Mumbai, has identified six other Indian cities where it wants to reach out to.