India’s aviation industry is poised for strong growth in 2025, with air passenger traffic expected to rise by 7%, according to Alton Aviation Consultancy Director, Mr. Joshua Ng. The robust growth is fueled by an expanding middle-class population, increasing affordability, and a surge in air travel demand. India has already regained pre-pandemic traffic levels, accounting for 10% of Asia-Pacific’s domestic and international air traffic.

India’s Expanding Aviation Market

The country is actively investing in its aviation infrastructure, with plans to develop 150 new airports nationwide. These expansions align with the government’s aviation development programme, aimed at making air travel more accessible and enhancing connectivity across regions. Additionally, Indian airlines have a combined order book of nearly 1,900 aircraft, ensuring capacity expansion in the coming years.

Impact of Air India-Vistara Merger

The merger between Air India and Vistara is expected to strengthen India’s full-service airline market, positioning Air India as a dominant player. Meanwhile, IndiGo continues to lead the low-cost airline sector, maintaining its market dominance with a focus on operational efficiency and expansion.

Global Aviation Industry Trends

On a global scale, air travel has returned to pre-pandemic levels, with projections indicating a steady 4% annual growth between 2024 and 2034. This growth is largely supported by a 2.7% rise in global GDP, fueling demand for air travel.

The Asia-Pacific region remains the largest aviation market, with an expected annual growth rate of 5.1%, primarily driven by China and India. Despite the positive outlook, the industry faces significant challenges, including:

• Aircraft delivery delays due to a 9.7-year backlog in major orders (as per CAPA and Alton’s analysis).

• Inflationary pressures affecting airline yields and ticket pricing.

• Geopolitical uncertainties impacting global airline operations.

Key Challenges for Airlines

While record passenger numbers and revenue are anticipated in 2025, airlines must navigate operational hurdles such as:

• Supply chain disruptions affecting aircraft production and maintenance.

• Labour shortages post-COVID-19, leading to higher operational costs.

• The need for improved aircraft utilisation and efficiency, including reduced turnaround times and strategic wet-leasing arrangements.

India’s Aviation Future: A Bright Path Ahead

Despite these challenges, India’s aviation sector remains on a strong growth trajectory. The government’s focus on expanding airport infrastructure, coupled with airlines' strategic expansions, is set to drive further growth. The increasing affordability of air travel and rising demand for domestic and international flights will solidify India’s position as a key player in the global aviation market.

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