New Delhi [India], March 20 : The dominance of foreign airlines on international routes presents a significant growth opportunity for Indian carriers, according to a report by rating agency ICRA.
International air passenger traffic for Indian carriers is projected to grow by 15-20 per cent in FY2025 and FY2026, against domestic air traffic growth of 7-10 per cent per year.
This growth is driven by increasing e-visa and visa-on-arrival coverage, along with the Indian government's push for theme-based tourist centres and iconic destinations.
International air passenger traffic from and to India reached 56.9 lakh in the first nine months of FY2025, reflecting an 11.4 per cent year-on-year increase and a 9.2 per cent rise compared to pre-Covid levels of FY2020.
Indian carriers saw a 40.7 per cent increase in international passenger traffic over pre-Covid levels, highlighting their rapid growth.
A major shift in the industry has been the rise of low-cost carriers (LCCs), which now account for 72 per cent of the total international passenger traffic for Indian carriers in 9M FY2025. This marks a significant change from previous years when full-service carriers (FSCs) dominated international routes.
However, Indian carriers also face multiple challenges, including restrictive policy regimes, slow reforms, and inadequate aviation infrastructure, which have historically limited their expansion on international routes.
As a result, foreign airlines have maintained a stronghold, with a market share ranging between 55 per cent and 60 per cent over the past three years. But, there is significant potential for Indian carriers to capture a larger share of the market.
ICRA expects Indian airlines to benefit from network expansion plans and the induction of wide-body aircraft, which will enable them to operate more long-haul international flights. A gradual increase in international routes by Indian carriers is likely to strengthen their market position in the coming years.
ICRA says that despite challenges such as restrictive policies and infrastructure limitations, Indian airlines are set to expand their presence in the global market.
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