India’s Air Passenger Traffic to Grow 7% in 2025: Alton Aviation

India’s air passenger traffic is set to experience a robust growth of 7% in 2025, propelled by an expanding middle class and the increasing affordability of air travel. This projection was made by Joshua Ng, Director of Alton Aviation Consultancy, a US-based aviation advisory firm.

Strong Growth in Aviation Sector

Speaking in Singapore, Ng highlighted that India has already returned to its pre-pandemic levels of air traffic, contributing approximately 10% of the Asia-Pacific region’s domestic and international air traffic demand. He emphasized that the growing passenger volume supports India’s extensive aviation development plans, including the construction of 150 new airports across the country. India’s aviation market is currently undergoing significant transformations. With an order book of nearly 1,900 aircraft for domestic airlines, the sector is gearing up to meet the anticipated surge in demand. The establishment of new airports will enhance connectivity, particularly in underserved regions, further driving growth.

Consolidation and Market Stability

Ng also pointed to the recent merger between Air India and Vistara as a stabilizing factor in the Indian aviation market. The consolidation is expected to strengthen the competitive landscape, with Air India and IndiGo emerging as dominant players in the full-service and low-cost carrier segments, respectively. This merger will likely bring greater operational efficiency and improved service quality for passengers.

Global Aviation Outlook

From a global perspective, Alton Aviation projects that air traffic will continue its long-term growth trend of 4% annually from 2024 to 2034, driven by a 2.7% annual growth in the global GDP. The Asia-Pacific region is expected to remain the largest aviation market, with an estimated growth rate of 5.1% per year. China and India will play a major role in this sustained expansion.

Supply Chain Challenges and Industry Concerns

Despite the optimistic outlook, the aviation sector faces notable challenges. The industry is currently grappling with a substantial backlog of aircraft deliveries. Ng cited data from Alton’s “Aviation Outlook 2025 – Supply Chain Challenged” report, which revealed a backlog of 7,216 A320neo aircraft. With an average annual production rate of 741 aircraft, the backlog represents a waiting period of nearly 9.7 years. The aftermath of the COVID-19 pandemic continues to impact the sector, resulting in supply chain disruptions and labor shortages. These factors have made it difficult for airlines and manufacturers to meet rising demand.

Strategic Adaptations by Airlines

To navigate these challenges, airlines are employing strategies such as optimizing aircraft utilization, reducing turnaround times, and streamlining schedules. Some carriers are also exploring wet-leasing agreements to temporarily boost capacity on specific routes. However, these decisions are heavily influenced by route-specific economic considerations. Additionally, inflation, normalizing ticket yields, and geopolitical uncertainties pose further risks to the industry. As Ng cautioned, industry stakeholders must remain vigilant and adaptive to ensure sustainable growth.

India’s aviation industry stands on the brink of significant growth, backed by infrastructure development, increasing aircraft orders, and strategic market consolidations. With passenger traffic expected to rise by 7% in 2025, the country is poised to become an even more influential player in the global aviation market. However, addressing supply chain constraints and operational challenges will be key to achieving long-term success.

As the sector navigates these complexities, stakeholders must adopt flexible and innovative approaches to capitalize on the opportunities that lie ahead.