CAPA India Aviation Outlook 2025 – Key Themes

For the last 21 years CAPA India has released both an annual aviation outlook and a mid-year update, which provide comprehensive guidance for the sector, covering demand, capacity, fleet, financial performance, operational & key strategic issues.

We take pride in our track record of accurately projecting the performance of the industry across more than 40 outlooks – even during the complex and uncertain times of the pandemic – supported by extensive research and proprietary modelling.

For the 12 months ending 31-Mar-2025, we expect domestic traffic to grow by 6-8% year-on-year, to reach 161-164mn airline passengers, up from 153.4mn in FY2024. Meanwhile, international traffic is projected to grow slightly faster at 9-11% year-on-year, to reach 75-78mn passengers (with guidance towards the lower end of the range), up from 69.6mn in FY2024.

Overall, growth is expected to be subdued in FY2025 compared to last year, due to ongoing capacity constraints stemming from the fact more than 130 aircraft remain grounded (over and above the GO FIRST fleet). The revival of both Go First and Jet Airways appears to be unlikely this year. And supply chain issues are expected to remain complex and challenging.

Financially, FY2025 is expected to be almost a mirror image of FY2024 for Indian airlines. Airlines are poised to sustain the high yields observed in FY2024, albeit with slight upward pressure on operating costs, primarily driven by manpower and maintenance expenses. Fuel and forex rates are anticipated to remain close to recent levels.

Consequently, the industry is forecast to achieve record revenues of USD19.9 billion, with a consolidated loss in the range of USD0.4–0.6 billion. However, LCCs are expected to be profitable, with IndiGo (InterGlobe Aviation Ltd) once again likely to post a profit of around USD1 billion.

FSCs are forecast to see an improvement in their financial performance, but will continue to incur significant losses due to the ongoing restructuring efforts within the Air India Limited Group.

With growth expected to accelerate beyond FY2025 as supply chain issues ease, CAPA India draws attention to the expected emergence of critical skill shortages across the aviation ecosystem, notably in technical roles such as pilots, maintenance engineers, and technicians.

The shortage of pilots is particularly acute and expected to worsen, exacerbated by new Flight Duty Time Limitations that could increase pilot requirements by approximately 15%. Addressing these shortages in the short-term appears challenging, further compounded by potential poaching of talent by Gulf carriers, including the soon-to-launch Riyadh Air. Insufficient air traffic controllers, as well as shortages in security and safety personnel, also pose significant challenges.

CAPA India has 21 years experience spanning 1100+ consulting and research assignments, for 400+ global clients, across the aviation value chain