Indian airlines face deeper losses amid rising costs and strong demand, CAPA India
India's aviation sector, at present is the world's fastest-growing market, is grappling with a supply-demand imbalance, resulting in packed planes and soaring ticket prices.
image for illustrative purpose
Hyderabad:
Indian airlines may brace for deeper losses in the fiscal year 2025, with industry experts predicting a shortfall between $400 million to $600 million. Despite rising demand and pricier tickets, escalating costs are expected to outweigh any gains.
The aviation consultancy, CAPA India, highlighted a 3.8% increase in overall airline expenses for the upcoming fiscal year.
Last year's figures were not disclosed. India's aviation sector, at present is the world's fastest-growing market, is grappling with a supply-demand imbalance, resulting in packed planes and soaring ticket prices.
IndiGo, the market leader, managed to post a record profit the previous year, which somewhat cushioned industry-wide losses.
However, the trend of robust yields, driven by high fares and increased passenger load factor, is anticipated to persist in the short term.
To overcome the problem, 84 new aircraft will be added this year, improvinf the industry's fleet size to 812.
CAPA India's CEO, Kapil Kaul, projected a doubling of the fleet size by 2030.
IndiGo commands a lion's share of the market with a 60% stake, while the Air India group, encompassing both budget and full-service carriers Air India and Vistara, holds about 30%.
With orders for over a thousand aircraft from Airbus and Boeing combined, expansion seems inevitable.
Looking ahead, CAPA India foresees domestic passenger traffic reaching 161-164 million, up from approximately 154 million, and international traffic climbing from 75 million to 78 million.
Despite the challenges, the Indian aviation sector remains poised for growth, albeit with financial turbulence on the horizon.
