Indian Airlines To Carry Half Of Country's International Traffic By 2028: Crisil

Indian Airlines To Carry Half Of Country's International Traffic By 2028: Crisil

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.

ANIUpdated: Monday, May 06, 2024, 04:56 PM IST
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The share of Indian airlines in international passenger traffic originating from, terminating in, or transitioning through India is expected to surge 50 per cent by fiscal 2028 from 43 per cent in 2024, according to Crisil Ratings.

The rating agency asserted that 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.

Growth of 70 Million in 2024

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.

India's international passenger traffic grew to around 70 million in fiscal 2024, from a low of 10 million in pandemic-hit fiscal 2021, to surpass the pre-pandemic level. The share of Indian airlines, which was rising steadily earlier, picked up pace since the pandemic.

"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

Indian airlines are looking to capture a large portion of the growth in international passenger traffic as it is typically more profitable due to higher margins and has less intense competition compared with domestic routes.

Indian airlines are looking to capture a large portion of the growth in international passenger traffic as it is typically more profitable due to higher margins and has less intense competition compared with domestic routes. | File

"The government's focus on making India a hub for tourism is also expected to provide a fillip to inbound traffic," he said.

The rating agency said international passenger traffic is likely to clock a compound annual growth rate (CAGR) of 10-11 per cent over the next four financial years, against a mere 5 per cent CAGR in the four years before the pandemic.

300 International Routes

Indian airlines are looking to capture a large portion of the growth in international passenger traffic as it is typically more profitable due to higher margins and has less intense competition compared with domestic routes.

They have added 55 new international routes over the past 15 months, taking their tally beyond 300, Crisil Ratings said.

"These include direct flights originating from additional cities to popular long-haul destinations in the United States, Europe and Australia, effectively reducing flying time and eliminating layovers," it said.

India's geographic location also lends itself well to air connections, positioning the country as a hub for international travel.

Ankit Kedia, Director, Crisil Ratings, said, "To capitalise on the growth in international travel, 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." 

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