India became the third-largest domestic airline market in the world as its domestic capacity saw the highest growth of 11.2% this month, among the other top 5 markets according to an analysis by aviation analytics firm, OAG. With its 1.55 crore domestic capability, India replaced Brazil which on the contrary saw a decline in its domestic market and was thus pushed to the fourth spot followed by Indonesia.

The low-cost carrier sector has been driving India’s growth in its domestic market. IndiGo leads in this sector as since 2014, the company has almost doubled its market share, from 32% to 62%. The airline has an average growth rate of 13.9% in domestic capacity despite barely any growth in the rest of the market. Mumbai to Delhi remains the eighth busiest flight route in the world with over 6.6 lakh seats.

A three-part series by OAG reveals that historically between 2005 and 2024, the domestic airline capabilities of India have on average grown annually by 8.7% which outperforms the international average of 6% annually. The report attributes this growth to the lifting of historic restrictions around the ability of foreign-based carriers to operate internationally from India.

“For a long time there was a requirement for carriers to operate in the domestic market first before being permitted to operate international services,” says the report.

The capacity has almost doubled during the last decade from 79 lakh to 1.55 crore in April 2024.

In 2014 India was the smallest market with a meagre 80 lakh domestic seats. The growth, however, in the international capacity has not been as phenomenal as the domestic market.

Nevertheless, what remains unchanged is the dominance of the Middle East in India’s international capacity. The Middle East’s contribution stood at 48% a decade ago and now has increased slightly to 50%. India and UAE remain the ninth most mutually visited countries in the world, with 21.08 lakh seats. A significant rise in Indian migration to the region is a major reason for this persistent dominance.

“An estimated 36 lakh Indians are now based in the UAE, with a further 2.6 million in Saudi Arabia. This demographic contributes significantly to the market, as levels of traffic visiting friends and relatives back in India will always form an important aspect,” highlights the report.

OAG is a global data provider of flight information, intelligence, and Aviation analytics for airports, airlines, and travel tech companies.

The report also compares the international capacity changes airlines underwent over the years. “The Indian carriers Air India and Jet Airways ranked first and second, accounting for 16% and 15% of capacity share respectively, followed by Emirates in third position with 9% capacity share,” the report indicates for the year 2014. IndiGo replaced 2019-discontinued Jet Airways in April 2014 becoming the second largest international carrier in terms of capacity.

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