In charts: How Indian airlines are going international

In IndiGo’s last earnings call in January, its chief executive officer, Pieter Elbers, gave two reasons why his airline is keenly pursuing international expansion. The first was the relatively small numbers of Indians flying abroad, and their low frequency of flying, which offered natural room for growth. The second was that foreign airlines had a greater share than Indian ones, and that competitive order could be challenged. Indeed, though Indian airlines still trail foreign carriers, they have come out on the other side of covid with a 4-6 percentage point gain in international share. They have held that gain since 2022-23, a period when aviation operations across the world have trended towards the normal.

In 2023-24, four of the top 10 airlines by passenger share in the Indian international segment were Indian. Three of these four gained share over 2019-20, led by IndiGo. Airlines that lost share included three prominent West Asian airlines: Emirates, Qatar Airways and Etihad. Given that West Asia is Indian aviation’s international mainstay, and had posted higher traffic, it meant that Indian airlines had weaned share away from big carriers from the region.

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International leader

Market leader IndiGo is replicating in the international segment what it did in the domestic segment—gaining share one destination at a time. Like Air India, IndiGo has also been tying up with foreign carriers, covering 49 destinations with its eight partners. In 2019-20, IndiGo’s share of Indian international passenger traffic was 11.5%. For April to September 2024 (the latest data available), it was 18.7%. The share of international in IndiGo’s revenues has increased from 14% in 2018-19 to 22% in 2023-24.

Further, the airline’s 2023-24 annual report sees a pathway to 30% in the coming years. One reason for its confidence is India’s air services agreements (ASAs)—essentially, the base document between two countries on how much commercial flight capacity is available to airlines of the other country. “A large number of India’s ASAs provide sufficient capacity entitlements to support the growth plans of Indian carriers,” IndiGo says in its 2023-24 annual report.

Advances and retreats

Indian aviation has bounced back after the covid-19 pandemic better than the world average. In 2023-24, both the domestic and international segments have crossed 2018-19 and 2019-20 levels. In 2023-24, India registered international passenger traffic of about 67 million, against about 61-64 annually between 2017-18 and 2019-20. The latest data on route pairings shows that the top routes are doing well. As many as 9 of the top 10 routes have crossed their pre-pandemic baseline, some in significant ways.

There’s active churn in the routes. On the one hand, 91 routes that were there in January-September 2019 were no longer there in January-September 2024. On the other hand, 87 new routes were added. And then, there are routes that have jumped manifold. Leading the way are Kuala Lumpur-Ahmedabad (25.5 times increase in passenger traffic), Kuwait-Hyderabad (11.7 times), San Francisco-Bengaluru (9.9 times) and Dammam-Kochi (8.8 times).

Unlocking traffic

There’s churn on the airline front also. Seventeen airlines from January-September 2019 are no longer flying to India, led by airlines from China that were banned by India till recently. At the same time, there are 15 new airlines, including Qantas, Vietnam Airlines, VietJet Air and American Airlines. West Asia and Africa account for about 54% of India’s international traffic, followed by Asia Pacific (about 28%), Europe (about 13%) and the Americas (about 3.5%).

West Asia and Asia have driven growth in the past five years, and Indian airlines are at the forefront. IndiGo, for instance, has 456 flights per week to 12 West Asia destinations. There are also emerging countries: Vietnam has gone from zero flights in January-September 2019 to half a million passengers in the same period of 2024. Similarly, the increase for Saudi Arabia is about 1.7 times. And that’s what Indian airlines are trying to ride.

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