Domestic aviation sector to see 6-8% growth, int'l travel at 9-11% for FY 25: CAPA India

Air travel outlook: Aviation analysis firm CAPA India has said that for the twelve months ending March 31, 2025, domestic airline traffic in India is expected to grow by 6-8 per cent year-on-year, reaching 161-164 million passengers, up from 153.4 million in FY2024. 
The international traffic is projected to grow slightly faster at 9-11 per cent year-on-year, reaching 75-78 million passengers, with guidance leaning towards the lower end of the range, up from 69.6 million in FY2024.

“Despite this growth, the overall increase in FY2025 is expected to be subdued compared to last year due to ongoing capacity constraints,” said the CAPA India outlook. 

As per the CAPA India report, over 130 aircraft remain grounded, not including the Go First fleet, and the revival of both Go First and Jet Airways appears unlikely this year. “The supply chain issues are anticipated to remain complex and challenging,” added the outlook. 

Sector-specific factors 

Financially, FY2025 is expected to closely mirror FY2024 for Indian airlines. High yields from FY2024 are likely to be sustained, though operating costs may see slight upward pressure, primarily driven by manpower and maintenance expenses. Fuel and forex rates are expected to stay close to recent levels, said the CAPA India outlook.  The industry is forecast to achieve record revenues of $19.9 billion, with a consolidated loss ranging from $0.4–0.6 billion. 

“However, low-cost carriers (LCCs) are expected to be profitable, with IndiGo likely to post a profit of around USD 1 billion. Full-service carriers (FSCs) are projected to see an improvement in financial performance but will continue to incur significant losses due to ongoing restructuring within the Air India Group,” the CAPA India report further added. 

As per the outlook, looking ahead, growth is expected to accelerate beyond FY2025 as supply chain issues ease. “However, CAPA India warns of the emergence of critical skill shortages across the aviation ecosystem, particularly in technical roles such as pilots, maintenance engineers, and technicians,” it said. 

The pilot shortage is especially acute and expected to worsen, exacerbated by new Flight Duty Time Limitations that could increase pilot requirements by approximately 15 per cent. Addressing these shortages in the short term appears challenging, further complicated by potential talent poaching by Gulf carriers, including the soon-to-launch Riyadh Air. Additionally, shortages of air traffic controllers and security and safety personnel present significant challenges, said the CAPA India FY25 outlook.