India may land in top 5 with 12.7% growth in airline seat capacity

On a more positive note, the report points out that with two major airlines, Air India and IndiGo, both having placed large aircraft orders, India's growth in aviation sector is expected to take off

India is projected to see a 12.7 per cent growth in overall airline seat capacity in 2024 compared to pre-pandemic levels in 2019, ranking fifth among the top 20 countries with the highest seat capacity globally.

 

A study by global travel data provider OAG highlights that the four countries that have recovered faster than India include Saudi Arabia (growth of 17.1 per cent), the United Arab Emirates (UAE) (15 per cent), Mexico (14.4 per cent), and Türkiye (12.3 per cent). However, even in 2024, nearly half of the top 20 countries still have not fully recovered to 2019 levels. These include France, Australia, Russia, Canada, Thailand, and South Korea.

 

In 2024, India’s overall seat capacity is expected to increase by 8 per cent year-on-year, placing it in seventh place. However, countries like Saudi Arabia (11.7 per cent) and the UAE (10.5 per cent), which are ahead, have done well. 

 

 

Several countries that saw declines between 2019 and 2024 are also on the upswing. For instance, Thailand, benefiting from visa-free offerings, has seen an increase in airline capacity by 13.8 per cent in 2024 over the previous year. South Korea also saw an upsurge in capacity growth of 16.7 per cent in the same period. Both Germany and Indonesia have recovered after a shrinkage in their seat capacity.

 

But the assessment points to some serious challenges in India’s airline capacity. IndiGo, which operates the A320 and A350 aircraft, currently has about 70 aircraft grounded due to a delay in receiving parts from Pratt & Whitney, resulting in a loss of over 68,000 seats per day.

 

On a more positive note, the report points out that with two major airlines — Air India and IndiGo — both having placed large aircraft orders, India’s growth in the aviation sector is expected to take off.

 

Globally, seat capacity recovery in 2024 is just 2.4 per cent higher than in 2019. Year-on-year, global airline capacity grew by 6.6 per cent, a rate that could have been higher.

 

The research also projects that demand may be cooling slightly following the ‘revenge travel’ surge of 2023, which saw record-breaking revenues. While the appetite for travel remains, economic pressures like the rising cost of living, increased taxation, and ongoing geopolitical challenges will keep airlines and airports on high alert heading into 2025.

 

Analysts predict that, much like the passenger car industry, where pent-up demand has subsided, the growth in car sales in India and globally is expected to slow down. The question remains: Will the aviation industry see a similar trend?