A recent report by CRISIL suggests that Indian airlines are on track to claim 50 percent of the country's international passenger traffic by 2027-28, marking a significant rise from the current 43 percent. This growth trajectory is attributed to strategic initiatives undertaken by airlines like Air India and IndiGo, including fleet expansion and the introduction of new international routes aimed at reducing travel time.
One key advantage highlighted in the report is the superior domestic connectivity enjoyed by Indian carriers compared to their foreign counterparts. With a wider reach across tier 2 and tier 3 cities, Indian airlines can provide seamless international connectivity on single tickets, a convenience not typically offered by foreign competitors.
Manish Gupta, Senior Director and Deputy Chief Ratings Officer at CRISIL Ratings, pointed out that factors such as increasing disposable incomes, relaxed visa requirements, and improved air travel infrastructure are fueling the growth in international travel.
The government's emphasis on positioning India as a tourism hub is expected to further boost inbound traffic. Ankit Kedia, Director at CRISIL Ratings, emphasized that Indian airlines are gearing up for this surge by investing in widebody and long-range narrowbody aircraft, expanding their network, and introducing long-haul non-stop flights to key destinations.
Projections indicate a robust compound annual growth rate (CAGR) of 10-11 percent in international passenger traffic over the next four fiscal years, a significant increase from the pre-pandemic CAGR of 5 percent.
Over the past 15 months, Indian airlines have added 55 new international routes, bringing the total number of flights beyond 300. These routes include direct flights from various cities to popular destinations in the United States, Europe, and Australia, resulting in shorter flying times and eliminating layovers.
CRISIL also highlighted India's strategic geographic location, bridging the Europe, Middle East, and Africa (EMEA) with the Asia Pacific regions. This positioning presents opportunities for India to emerge as a key hub for international travel in the coming years.
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