'Indian Airlines to face more loss in 2025, despite rise in demand and ticket prices'

Indian airlines are expected to post a bigger industry-wide loss in fiscal 2025 as higher costs outweigh rising demand and costlier tickets, a top aviation consultancy said on Wednesday.

CAPA India estimated losses for the year ending March 2025 at between $400 million to $600 million. The industry reported a loss of $300 million – $400 million the previous year, helped by market leader IndiGo’s record profit.

Overall airline costs are expected to rise 3.8% in the fiscal year 2025, the consultancy added. It did not say how much they rose last year.

India is currently the world’s fastest-growing aviation market with demand surpassing the supply of planes.

That has helped the industry report record yields as carriers charge higher fares due to a capacity crunch, resulting in more packed planes, measured in passenger load factor (PLF).

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CAPA said it expects the trend of record yields – the average amount paid by a passenger to fly one kilometre – to continue in the short term and sees a roughly 1% rise for fiscal 2025. It pegged PLF at 85% for the same period.

However, the crunch would be eased with an addition of 84 aircraft in the current year, taking airlines’ overall fleet – including grounded jets – to 812 from 728 as of March, CAPA India CEO Kapil Kaul said at the consultancy’s annual summit.

Airlines; fleet size will more than double by 2030, he said.

India’s skies are dominated by low-cost carrier IndiGo, which holds a 60% market share. The Air India group, which houses two budget carriers and two full-service carriers in Air India and Vistara, have a roughly 30% share.

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Together, they have over a thousand aircraft on order from Airbus and Boeing.

CAPA India estimated domestic passenger traffic to grow to 161 million to 164 million from about 154 million. The consultancy sees international traffic growing to 75 million to 78 million.