By admin, Published on July 19th, 2024 in Blog, News
Dr. Navdeep Kaur Dhillon
PhD, Punjabi University, Patiala.
Over the last 10 years the Indian airline industry has undergone some remarkable changes and growth, which was mainly driven by Indian airlines. This article gives a general view on how well these companies have performed within a ten-year period running from 2014 till 2024 outlining both achievements as well as challenges that these companies face during their daily operations at present time as well as in the near future.
History of aviation sector in India:
Before the deregulation of the civil aviation sector in 1991, two national airlines controlled the Indian sky. Indian Airlines focused on domestic service, while Air India International provided international flights. Since the deregulation, many private airlines rose and fell in this immensely competitive market. The sector began to stabilize in the 2010s. After the sale of Air India to the Tata Group by the government in 2022, the civil aviation landscape came to be dominated by private providers. IndiGo and SpiceJet are among some of the most successful airlines in the country.
The period from 2014 to 2017 saw Indian airlines experience rapid growth, driven by factors such as increasing demand, liberalization of the aviation sector, and investments in infrastructure. Over the past 10 years, the domestic passenger traffic has more than doubled. In 2015, 38.83 million passengers traveled domestically. IndiGo played a key role in serving the Indian market, with its passenger share increasing from 37.5% in 2015 to 60.7% now.
Former national carrier Air India nearly maintained its market share. Full-service airline Vistara, which had commenced operations in 2015, saw its market share increase from 0.9% to almost 10% now.
The decade has been turbulent for Indian airlines, with Jet Airways and GoFirst going defunct, while SpiceJet being majorly hit by financial troubles and now running decimated operations. Meanwhile, new airlines including Akasa Air, Fly91, and Star Air have commenced operations.
According to a report by the International Air Transport Association (IATA), India’s domestic air passenger traffic grew at a compound annual growth rate (CAGR) of 12.4% between 2014 and 2017, making it one of the fastest-growing aviation markets in the world (IATA, 2018). During this period, Indian airlines such as IndiGo, SpiceJet, and GoAir expanded their fleet and route networks, both domestically and internationally. IndiGo, in particular, emerged as the largest low-cost carrier in India, with a market share of over 40% (CAPA, 2017).
However, the Indian aviation industry faced significant challenges between 2018 and 2020, including rising fuel costs, intense competition, and regulatory hurdles. The industry was also impacted by the grounding of Jet Airways, one of India’s largest private airlines, in 2019 (The Economic Times, 2019).
Despite these challenges, Indian airlines continued to invest in modernizing their fleets and improving their services. For instance, Vistara, a joint venture between Tata Sons and Singapore Airlines, launched its operations in 2015 and has since become known for its premium services (Vistara, n.d.).
The Covid-19 pandemic had a devastating impact on the Indian aviation industry, with air travel coming to a near-halt in 2020. However, Indian airlines responded quickly to the crisis, implementing safety measures, and adapting to new regulations (DGCA, 2020). As the pandemic subsided, Indian airlines began to recover, with domestic air travel demand rebounding strongly.
Development of airports:
The Indian government has set a target of increasing the number of airports in the country from 140 to 220 by 2025, which is expected to boost air travel demand (MoCA, 2023). Between 2014 and 2023, the number of airports in India doubled from 74 to 149, the then Indian aviation minister Jyotiraditya Scindia had said. India is also poised for a surge of 60 million in its annual passenger capacity after the inauguration of new terminal buildings at 12 airports.
According to a report by the Ministry of Civil Aviation, India’s domestic air passenger traffic grew by 47.5% in 2022 compared to the previous year (MoCA, 2022). The Indian aviation industry is expected to continue its growth trajectory in 2023 and 2024, driven by factors such as increasing demand, infrastructure development, and government initiatives.
Between January and June 2024, Indian airlines has carried 79.35 million passengers. The Indian aviation industry has recorded its highest-ever domestic passenger traffic for a half year. This was an increase of over 4% from the previous year, as per data from Indian aviation watchdog Directorate General of Civil Aviation.
Before this, the highest-ever passenger traffic for a half year was recorded in 2023, when 76.09 million passengers traveled on domestic airlines. The passenger traffic in 2023 had surpassed by 7.7% from the pre-CoViD levels of 70.68 million passengers.
Indian airlines have been investing in sustainability initiatives, such as using sustainable aviation fuel and reducing carbon emissions. For instance, IndiGo has announced plans to operate 30% of its flights using sustainable aviation fuel by 2025 (IndiGo, 2022).
In conclusion, the performance of Indian airlines from 2014 to 2024 has been marked by growth, challenges, and resilience.
Despite facing significant hurdles, Indian airlines have continued to invest in modernizing their fleets, improving their services, and adapting to changing market conditions. As the industry looks to the future, it is expected to continue its growth trajectory, driven by increasing demand, infrastructure development, and government initiatives.
With inputs from: Team FlyAmritsar Initiative & Anant Dhillon
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