INDIAN AIRLINES EYEING A MEATIER PIE; TO CARRY HALF OF COUNTRY'S INTERNATIONAL TRAFFIC TOO BY FY28
Indian airlines that have “superior domestic connectivity” are expected to carry half of the country’s international traffic too by FY28. Additional aircraft, new routes in the international segment, and its domestic network would drive this hike in shares.
According to a report by CRISIL, the share of Indian airlines in international passenger traffic originating from, terminating in, or transitioning through the country would surge 700 bps to ~50 per cent by fiscal 2028 from 43 per cent in 2024.
“The improvement would be driven by Indian 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. The business profiles of Indian carriers will strengthen as a result of their rising share in international traffic, which is more profitable than the domestic segment,” stated the CRISIL report.
India’s international passenger traffic grew to around 70 million in fiscal 2024 from a low of 10 million in COVID-hit fiscal 2021. It would surpass the pre-pandemic level, said the report.
“A noticeable shift in spending patterns has emerged after the pandemic, as evident in the increasing inclination of Indians towards international leisure travel. Increasing disposable incomes, easing visa requirements, growing number of airports and enhanced air travel connectivity are boosting international travel,” said Manish Gupta, Senior Director and Deputy Chief Ratings Officer, CRISIL Ratings, adding that the government’s focus on making India a hub for tourism is also expected to provide a fillip to inbound traffic.
This report comes as Indian airlines look to capture a large portion of the growth in the international passenger traffic as profit is higher due to higher yields and less intense competition. Indian airlines have added 55 new international routes over the past 15 months, taking the overall number beyond 300 routes.
Indian airlines are aiming to deploy additional aircraft on short- and medium-haul international routes as well as leverage codeshare agreements with major global airlines. The report added that Indian airlines have certain advantages in cornering a larger share of the country’s international traffic. “They have superior domestic connectivity than their overseas counterparts – which serve only select Indian cities – and can offer end-to-end international connectivity on a single ticket to travellers from Tier 2 and Tier 3 cities,” stated the report.
Ankit Kedia, Director, CRISIL Ratings stated that Indian airlines are investing in widebody and long-range narrowbody aircraft for network expansion, adding new international routes and introducing long-haul non-stop flights to key destinations to capitalise on the growth of international travel. He predicted a CAGR of 14-15 per cent in the international segment over the next four fiscals, taking the market share of Indian airlines to 50 per cent.
2024-05-07T04:05:37Z dg43tfdfdgfd