India is the third-largest domestic airline market in the world, up from the number five position a decade ago

According to analysis based on OAG data, India is the third-largest domestic airline market in the world, up from the number five position a decade ago. The data shows India’s domestic airline capacity doubled in a decade from 7.9 million in April 2014 to 15.5 million in April 2024.

 India has replaced Brazil (pushed to fourth place with 9.7 million) and Indonesia (relegated to fifth in the rankings with 9.2 million) in reaching the third slot. The US (86.1 million) and China (67.8 million) are still far ahead in the competition holding the top two positions.

India’s capacity growth rate of seats over a 10-year average is the highest amongst the top five countries, growing at 6.9 per cent annually, followed by China at 6.3 per cent, the US at 2.4 per cent, Indonesia at 1.1 per cent and Brazil experiencing an annual decline of 0.8 per cent.

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As per the reports, OAG said that India’s transition to low-cost carriers (LCCs) has been the sharpest among the top five.  In April 2024, LCCs accounted for 78.4 per cent of Indian domestic capacity, followed by Indonesia at 68.4 per cent, Brazil at 62.4 per cent, the US at 36.7 per cent, and China at 13.2 per cent.

The LCC growth has been fuelled by IndiGo; in the last decade, its market share has nearly doubled from 32 per cent to 62 per cent. While the rest of the market has seen its seat growth averaging 0.7 per annually in the decade, IndiGo has seen a domestic capacity growth of 13.9 per cent every year.

OAG stated, “It is inevitable that the substantial narrow-bodied aircraft ordered by the two will also be used to expand domestic capacity. While both IndiGo and Air India are now looking at aggressively moving internationally.”

According to ch-aviation (subscription-based intelligence platform), 96 per cent of IndiGo’s orders for 982 planes is for slender aircraft while 74 per cent of the 447 aircraft ordered by Air India is narrow-bodied. The big concern though, is whether India has enough airports to cater to this soaring growth. India has 119 airports offering domestic flights compared to 250 in China and 656 in the US airline.

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 IndiGo has projected that domestic passengers will double from 155 million in 2024 to 350 million in 2030. This is the gainsay expected to be overcome by the Civil Aviation Ministry.