ICRA forecasts 20% growth in international air passenger traffic for Indian carriers, BA

India’s domestic air passenger traffic for February 2025 was estimated at approximately 143.0 lakh, marking a year-on-year growth of around 13.1 per cent. This figure was also 16.0 per cent higher than pre-Covid levels in February 2020. However, February’s traffic was slightly lower than January 2025 by about 2.1 per cent, due to fewer days in the month. For the 11 months of FY2025 (April 2024 to February 2025), domestic passenger traffic reached approximately 1,551.0 lakh, reflecting a growth of 7.7 per cent compared to the previous year and a 12.9 per cent increase over the pre-Covid figure of 1,338.0 lakh in FY2020.The international air passenger traffic for Indian carriers stood at approximately 280.9 lakh for the first ten months of FY2025, marking a year-on-year growth of 14.8 per cent. This was also 41.3 per cent higher than the pre-Covid level of 198.8 lakh in FY2020. Airlines’ capacity deployment in February 2025 was 5.1 per cent higher than February 2024, although it was down 7.2 per cent compared to January 2025. The domestic aviation industry operated at a passenger load factor (PLF) of approximately 95.3 per cent in February 2025, compared to 89.0 per cent in February 2024 and 87.7 per cent in February 2020.ATF prices were 5.3 per cent higher year-on-year from April to July 2024, but decreased by 13.9 per cent from August 2024 to March 2025. Overall, for FY2025, ATF prices were 8.0 per cent lower than the previous year.

ICRA forecasts a 15-20 per cent growth in international air passenger traffic for Indian carriers in FY2025 and FY2026, outpacing the domestic growth of 7-10 per cent. The growth is supported by increasing e-visa and visa-on-arrival options, alongside government initiatives to promote tourism in India.

India’s international routes have historically been dominated by foreign carriers, with Indian carriers holding a market share of 55-60 per cent over the past three years. This low share offers substantial growth opportunities for Indian carriers, particularly as reforms and aviation infrastructure improve. Additionally, the rise of low-cost carriers (LCCs) has been a key driver of international air passenger traffic, accounting for 72 per cent of the traffic in 9M FY2025.