India’s aviation sector ranks third largest in the world

India has surpassed Brazil and Indonesia to become the third largest domestic aviation market. IndiGo and Air India, with orders for over 1,000 aircraft combined, dominate the market by securing 90% of domestic seats in India.

Robust passenger demand and expansion by its major carriers reflect India’s growing influence in global aviation. According to aviation data analytics firm OAG, India has now become the world’s third largest domestic aviation market, surpassing both Brazil and Indonesia. IndiGo and Air India, with a collective order of over 1,000 aircrafts, control 90% of the domestic air travel market in India. This significant achievement underscores the country’s rise to this position highlights its rapidly growing aviation infrastructure and increasing connectivity within the domestic market.

Indian airlines are experiencing remarkable growth with an annual increase of 6.9% in the number of seats available in the domestic sector, marking the fastest growth rate globally. Notably, 78.4% of India’s domestic airline capacity is dominated by low-cost carriers, representing the highest proportion among the top five domestic aviation markets. This trend shows a significant shift towards affordability and accessibility in air travel within India, facilitated largely by the expansion and competitiveness of budget airlines. As the demand for air travel continues to rise in the country, driven by economic growth and increasing connectivity, these statistics highlight India’s position as a dynamic and rapidly evolving player in the global aviation industry.

As one of the fastest-growing economies, India’s aviation sector is poised for further growth driven by several key factors. With a rising working-age population and an expanding middle class, there is a projected increase in air travel demand. India has ambitious plans to expand its airport infrastructure, aiming to increase the number of operational airports to 220 by 2025. Anticipating this growth, India is expected to require 2,500 new commercial airplanes by 2038. The sector is also witnessing substantial investments, with six international airports already completed under Public-Private Partnership (PPP), and further investments estimated at US$ 25 billion by 2027. Private sector participation through PPP is increasing, with the number of PPP airports set to rise from five in 2014 to 24 by 2024.

Moreover, recent policy revisions, such as extending land allotment for Maintenance, Repair, and Overhaul (MRO) facilities to 30 years, underscore India’s ambitions to become a global hub for MRO services. These initiatives are supported by favorable Foreign Direct Investment (FDI) policies, allowing 100% FDI in scheduled air transport services, further enhancing India’s attractiveness as a destination for aviation investments.