Air traffic to grow 20% in FY24 as Indian carriers add 132 aircraft: Report

Turbine fuel cost and declining yields to put pressure on airlines, says CAPA India

Domestic and international passenger traffic will grow more than 20 per cent in FY24, driven by fleet addition as Indian airlines lose $1.6-1.8 billion due to a weak rupee and fuel costs increasing, said an industry consultancy on Monday.

Indian airlines are expected to add 132 aircraft in FY2024 to tap passenger demand. Air India is expected to induct 53 aircraft and IndiGo will add 49 aircraft, said CAPA India in its annual outlook. The combined fleet size of Indian carriers will increase from 684 at the end of March 2023 to 816 by March 2024.

Domestic traffic will increase by around 20 per cent year-on-year to 160 million passengers in FY24 while international traffic will be up 22-27 per cent to 72-75 million. "Increased capacity deployment by low cost carriers on international routes to significantly stimulate traffic," said CAPA India.

Domestic air traffic grew 47.5 per cent year on year to 123.2 million in calendar year 2022, according to data from the Directorate General of Civil Aviation.

An increase in aviation turbine fuel cost and yields declining due to capacity addition will put pressure on airlines. The industry’s loss is estimated at $1.6 to $1.8 billion in FY24. While full service airlines are expected to post a loss of $1.1-1.2 billion, low cost airlines will lose $0.5-0.6 billion, the consultancy said