Indian Aviation Reports Best-Ever First Half in 2024: IndiGo and Tata Group Airlines Soar High, SpiceJet Struggles

The Indian aviation industry has witnessed its best-ever first half in 2024, with a record 7.93 crore passengers traveling between January and June this year. This marks a significant growth of 12.3% compared to the same period in 2019, before the COVID-19 pandemic. The industry has been steadily recovering since then, with 2023 being the best-ever year for domestic aviation in India, surpassing pre-COVID numbers by 5.77%.

Despite a slight dip in June, the month still recorded the highest-ever air traffic in India, with 1.36 crore passengers flying. This growth is attributed to the resilience of the Indian aviation sector, which was one of the first to bounce back to pre-pandemic levels last year. The current year is reinforcing this growth story, despite ongoing challenges.

IndiGo, one of the two listed airlines in India, has been flying high, with record profits in the last financial year. However, the industry is facing a severe shortage of planes, with around 70-80 aircraft grounded due to faulty engines. SpiceJet, on the other hand, has struggled to resolve issues with lessors and secure funds to repair its aircraft, resulting in a significant decline in its market share.

The shortage of planes has led to an increase in fares, with many passengers complaining of having to pay double or more than pre-COVID fares. Departures have increased by only 2.5%, lower than the traffic growth, indicating a higher load factor due to higher fares. Capacity has increased by 3.7%, further supporting this trend.

The Tata group of airlines, including Air India, AirAsia India, and Vistara, have been the biggest beneficiaries of the growth in the market. Their combined market share has risen to 28.7%, up from 24.1% pre-COVID. IndiGo’s market share has stabilized around 47.1%, after facing headwinds due to engine availability and grounding issues.

SpiceJet, on the other hand, has been the biggest loser, with its market share dropping below 4% in June and closing the second quarter of 2024 with just 4.2%. The airline’s struggles are largely due to its own reasons, rather than the market. Market share is often a function of capacity share and deployment in the market.

Akasa Air, Air India, and IndiGo have been the top three airlines in terms of slot compliance, using almost all the slots allocated as part of the Summer Schedule. Air India Express and SpiceJet have been the worst performers in slot usage as of May 2024.

Every month this year has seen higher air traffic compared to the same month last year, with the exception of November. The steady growth of 5% could translate into the year closing with 16 crore passengers, a first for the Indian domestic industry.

Historical Context:

The Indian aviation industry has been steadily recovering since the COVID-19 pandemic, with 2023 being the best-ever year for domestic aviation in India, surpassing pre-COVID numbers by 5.77%. The industry’s resilience has been remarkable, with it being one of the first to bounce back to pre-pandemic levels last year. The current year is reinforcing this growth story, despite ongoing challenges.

Summary in Bullet Points:

• The Indian aviation industry has witnessed its best-ever first half in 2024, with a record 7.93 crore passengers traveling between January and June this year, marking a 12.3% growth compared to the same period in 2019. • Despite a slight dip in June, the month still recorded the highest-ever air traffic in India, with 1.36 crore passengers flying. • IndiGo has been flying high, with record profits in the last financial year, while SpiceJet has struggled to resolve issues with lessors and secure funds to repair its aircraft, resulting in a significant decline in its market share. • The shortage of planes has led to an increase in fares, with many passengers complaining of having to pay double or more than pre-COVID fares. • Departures have increased by only 2.5%, lower than the traffic growth, indicating a higher load factor due to higher fares. • Capacity has increased by 3.7%, further supporting the trend. • The Tata group of airlines, including Air India, AirAsia India, and Vistara, have been the biggest beneficiaries of the growth in the market, with their combined market share rising to 28.7%. • SpiceJet’s market share has dropped below 4% in June and closed the second quarter of 2024 with just 4.2%. • Akasa Air, Air India, and IndiGo have been the top three airlines in terms of slot compliance, using almost all the slots allocated as part of the Summer Schedule. • Air India Express and SpiceJet have been the worst performers in slot usage as of May 2024. • Every month this year has seen higher air traffic compared to the same month last year, with the exception of November. • The steady growth of 5% could translate into the year closing with 16 crore passengers, a first for the Indian domestic industry.