CAPA India: High yields, healthy pax growth on tap

For the 12 months ending 31 March 2025, the CAPA India Aviation Outlook 2025 has projected domestic traffic to grow by 6-8% year-on-year, to reach 161-164 million airline passengers, up from 153.4 million in FY2024. Meanwhile, international traffic is projected to grow slightly faster at 9-11% year-on-year, to reach 75-78 million passengers (with guidance towards the lower end of the range), up from 69.6 million in FY2024. Overall, growth is expected to be subdued in FY2025 compared to last year, due to ongoing capacity constraints stemming from the fact more than 130 aircraft remain grounded (over and above the GO FIRST fleet). The revival of both Go First and Jet Airways appears to be unlikely this year. And supply chain issues are expected to remain complex and challenging. Financially, FY2025 is expected to be almost a mirror image of FY2024 for Indian airlines. Airlines are poised to sustain the high yields observed in FY2024, albeit with slight upward pressure on operating costs, primarily driven by manpower and maintenance expenses. Fuel and forex rates are anticipated to remain close to recent levels. Consequently, the industry is forecast to achieve record revenues of US$19.9 billion, with a consolidated loss in the range of US$0.4–0.6 billion. However, LCCs are expected to be profitable, with IndiGo (InterGlobe Aviation Ltd) once again likely to post a profit of around US$1 billion. FSCs are forecast to see an improvement in their financial performance, but will continue to incur significant losses due to the ongoing restructuring efforts within the Air India Limited Group. With growth expected to accelerate beyond FY2025 as supply chain issues ease, CAPA India has drawn attention to the expected emergence of critical skill shortages across the aviation ecosystem, notably in technical roles such as pilots, maintenance engineers, and technicians. The shortage of pilots is particularly acute and expected to worsen, exacerbated by new Flight Duty Time Limitations that could increase pilot requirements by approximately 15%. Addressing these shortages in the short-term appears challenging, further compounded by potential poaching of talent by Gulf carriers, including the soon-to-launch Riyadh Air. Insufficient air traffic controllers, as well as shortages in security and safety personnel, also pose significant challenges. For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Kay Rolland at [email protected]