India now 3rd-largest domestic airline market; capacity doubles in 10 yrs

India is the third-largest domestic airline market in the world, up from number five position a decade ago, according to analysis based on OAG data.

The data shows India’s domestic airline capacity doubling in a decade from 7.9 million in April 2014 to 15.5 million in April 2024.

In reaching the third slot, India has replaced Brazil (pushed to fourth place with 9.7 million) and Indonesia (relegated to fifth in the rankings with 9.2 million).

The US (86.1 million) and China (67.8 million) are still far ahead in the game 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 by 1.1 per cent and Brazil experiencing an annual decline of 0.8 per cent.

OAG says 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 fueled 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 annually.

Clearly, while both IndiGo and Air India are now looking at aggressively moving international, OAG says it is inevitable that the substantial narrow-bodied aircraft ordered by the two will also be used to expand domestic capacity.

According to ch-aviation, 96 per cent of IndiGo’s order for 982 planes is for narrow-bodied aircraft while 74 per cent  of the 447 aircraft ordered by Air India is narrow-bodied.

The big question, 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.

Indigo has projected that domestic passengers are projected to double from 155 million in 2024 to 350 million in 2030.

This is the challenge lying in the inbox of the Civil Aviation Ministry.