The Indian aviation industry is expected to bring down its losses to INR 20-30 billion ($236-354 million) during the 2025 and 2026 fiscal years, according to credit rating agency ICRA. The reduction in losses will be supported by improved pricing power of the airlines, said Kinjal Shah, senior vice president and co-group head at ICRA.
“The spread between revenue per available seat kilometer and cost per available seat kilometer (RASK-CASK) saw some moderation in the first half this year due to higher fuel costs and overall increased costs amid grounding of aircraft,” Shah said. “The same is expected to pick up in the second half amid healthy passenger traffic.”
Data We Love: The credit rating agency estimated that domestic air passenger traffic in the current fiscal year will reach 164-170 million, indicating a 7-10% year-on-year growth.
Between April and September, 79.3 million domestic passengers traveled through air, over 5% more than last year. However, the air traffic was impacted by severe heat waves and other weather-related disruptions.
Indian airlines recorded a growth of more than 16% in international passenger traffic during this period. ICRA expects this momentum to continue in the second half of the fiscal year. According to the agency’s projections, international traffic through Indian airlines will stand at 34-36 million for the full year, a 15-20% growth compared to last fiscal.
Airline Fleet: ICRA noted that the industry continues to be impacted by challenges in the supply chain and engine failures. It estimated that around 16-18% of the total industry fleet was grounded at the end of September, down from 20-22% in September 2023.
“As on September 30, 2024, the industry had a total fleet of 853 aircraft (including about 144 aircraft on ground). There are large aircraft purchase orders announced by various players in the industry and as per the indicative numbers, the total pending aircraft deliveries is around 1,660, which is almost double the current fleet in operations,” Shah said.
The senior VP added, however, that a sizable part of the fleet addition is meant for expanding international operations.
India Witnesses a 38% Drop from Its Top Source Market
Tourist arrivals to India from Bangladesh dropped by nearly 40% in August this year, according to the latest data shared by the government. During the month, a little over 99,000 Bangladeshi tourists visited India, as compared to over 160,000 last year. In July, the decline in tourists from the neighboring county was over 20%. The decline came as Bangladesh underwent a political upheaval during the two months. Between January and June 2024, Bangladesh was the top source market for tourism to India, accounting for almost 22% of the arrivals.
Last year, 2.12 million Bangladeshi tourists visited India, according to data from the Bureau of Immigration. As of August 2024, this number stood at 1.29 million, the ministry of tourism said. This was over 9% less than Bangladeshi visitors during the same period last year.
What are Indian Hoteliers Optimistic About?
Indian hoteliers are optimistic about growth in the country, online travel company Booking.com has revealed in a new report. It noted that 75% of the surveyed hoteliers are expecting the economic situation to improve within the next six months, and close to 70% anticipate that their business will grow.
Hoteliers are also finding it easier to access resources, along with a rising investment appetite. They are also increasingly adopting technology, including embracing online travel platforms, social media marketing, and optimizing hotel websites. Nearly 70% hoteliers are also incentivizing and encouraging repeat visitors.
However, they are worried about potential tax increases, competition from other accommodation providers, costs related to energy and staffing, and government regulations and bureaucracy.
Air India Holds 55% Market Share on Metro Routes
Air India now holds a 55% market share on metro-to-metro routes, Air India CEO Campbell Wilson said speaking to reporters recently. On the top 120 domestic routes, the group’s share stands at about 40%, he added.
The combined market share of its group companies in October 2024 stood at around 29%. This is a distant second to IndiGo’s 63% share. It is expecting to ramp up its operations as it awaits delivery of aircraft. Wilson said that Air India has plans to add 100 planes to its fleet by 2027.
It has also undertaken a retrofit program to upgrade its existing fleet, including 40 widebody aircraft. The program is expected to commence by the middle of next year and complete in 2027 as global supply chains are affecting availability of parts.
Oyo’s ‘Company-Serviced’ Hotels Grow 250%
Hospitality technology company Oyo has said that its “company-serviced” hotels business has achieved 250% growth within a year of its launch. Surpassing its target of 200 properties, Oyo said it has managed to add 700 hotels to its portfolio.
The business segment was launched in September last year. Oyo manages its company-serviced hotels, unlike its traditional franchising model. “These hotels have driven substantial improvements in key metrics, including occupancy rates and customer satisfaction,” said Varun Jain, chief operating officer of Oyo India.
In a parallel move, Oyo last month launched Oravel Travel Solutions, a dedicated B2B platform aimed at capturing the booming corporate travel market, which is projected to double to $21 billion by 2030, according to a Deloitte report.
Malaysia Airlines Commences Flights to Kolkata
Malaysia Airlines has commenced flights to Kolkata as a part of its network expansion. The direct flight will operate between Kuala Lumpur and Kolkata.
With this, Malaysia Airlines’ network expands to 16 Indian destinations, including those that fall under the airline’s partnership with IndiGo.
The Malaysian flag carrier has also announced the Oberoi Group as its new in-flight catering provider. It will cater flights departing from Kolkata, New Delhi, Mumbai, and Chennai.
