Indian Carriers Eye Expansion Amidst Foreign Airline Stronghold

Indian airlines are poised for growth in the international sector, with an expected 15-20% increase in passenger traffic by 2025-2026, driven by enhanced visa facilities and government support. While challenges like restrictive policies persist, expansion plans signal potential market share gains against foreign competition.

According to a report by ICRA, Indian carriers are set to capitalize on the international routes currently dominated by foreign airlines. The report forecasts a significant upswing, with international passenger traffic projected to grow by 15-20% in fiscal years 2025 and 2026, outpacing the domestic growth rate of 7-10% annually.

This optimistic outlook is underpinned by expanded e-visa and visa-on-arrival facilities, alongside initiatives by the Indian government to boost tourism through theme-based centers and iconic destinations. India's international passenger traffic surged to 5.69 million in the first three quarters of FY2025, showing an 11.4% year-on-year increase and a 9.2% rise from pre-pandemic levels in FY2020.

Low-cost carriers have been pivotal in this growth narrative, comprising 72% of international passenger traffic for Indian carriers in the first nine months of FY2025, marking a departure from the past dominance by full-service carriers. Despite foreign airlines maintaining a 55-60% market share due to policy and infrastructure constraints on Indian carriers, ICRA notes a strong opportunity for Indian airlines to expand their international footprint.