There was optimism in the air and opulence on ground as Air India Express (AIX) unveiled its new brand identity at a glitzy event in Mumbai last week. The mood was celebratory and reason was hard to miss. 

AIX began operations in 2005 connecting cities in South India to West Asia. It has largely been a profitable venture but growth has been stagnant due to its limited fleet size. 

Things are now changing. With a strong promoter, a large aircraft order and integration with AirAsia India, the airline is now gaining altitude.  

AIX will induct 50 Boeing 737 Max aircraft between now and next December to widen its footprint. It is targeting new routes to Bangladesh, Nepal and Sri Lanka in the first six to eight months. This will be followed by expansion to Thailand and Vietnam. On the domestic front, the airline is planning to consolidate the network.

The airline is targeting 15 per cent market share in the domestic network and 20 per cent in short haul international market in the next five years. 

“We are not looking for growth for growth’s sake. We are aiming for measured growth that will lead to profitability,” said Aloke Singh, Air India Express CEO and Managing Director.  

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Singh said that the airline has 350 pilots under training now and aims to hire another 800-900 in the next 12-15 months to take care of its medium-term pilot requirements. Apart from upgrading first officers to commanders, the airline will also rely on pilots from defence forces, expatriates and fresh commercial pilot licence holders to build up its strength. 

Air India Express’s growth plans come amid continued resurgence in air travel. Domestic airlines flew 112.8 million passengers between January-September this year registering a year-on-year growth of 29 per cent.

Domestic air traffic has remained stable growing by over a per cent in first three weeks of October on a month-on-month basis despite a recent fare hike by IndiGo.

Demand for upcoming festive season, too, is strong. 


“Advance bookings for Diwali have surged 12 per cent year-on-year reflecting a robust demand for travel. Most searched and booked domestic destinations are Delhi, Mumbai, Goa, Jaipur and Varanasi,” said Aloke Bajpai, co-founder and group CEO, ixigo. 

“Domestic air fares are trending higher by 8 per cent in October on a month-on-month basis. On a year-on-year basis, the fares are higher by 5 per cent. Demand though continues to be resilient for the holiday period,” said Dhruv Shringi, co-founder and CEO of 

However not all airlines are benefitting from this travel boom.

Akasa Air has reduced its flights after around 40 pilots left the airline overnight to join AIX. Akasa Air has also initiated litigation in Bombay and Delhi High Courts seeking action against erring pilots. 

The airline, however, hopes to recover the lost ground and increase its network by 30 per cent by next March. 

SpiceJet is facing a cash crunch that has resulted in dwindling operations and market share loss whereas Go First remains grounded with no clear timeline for its restart.


Go First’s resolution professional Shailendra Ajmera minced no words when he met the airline employees in a townhall meeting earlier this month. While the staff pressed for payment of pending salaries, Ajmera’s message was clear. Go First’s future depends on its ability to retain its aircraft amid an ongoing court battle with lessors, he said.

The Wadia-group owned airline suspended operations in May due to a cash crunch resulting from faulty aircraft engines. It has received two expressions of interest—from Jindal Power Limited and Jettwings Airways—but revival remains uncertain. 

Since the suspension of its flights on May 2, Go First has lost pilots, engineers, cabin crew and other staff to airlines. Not just human resources, it has ceded market share too.


At the start of the year, Go First had 8.4 per cent share of the domestic market. In April, a month before its closure, it had reduced to 6.4 per cent.  

IndiGo capitalised the most from Go First’s grounding. Its market share rose from 54.6 per cent in January to 63.4 per cent in September. IndiGo flew 6.84 million domestic passengers in January and that grew to 7.77 million in September with an increase in fleet size and new destinations.

IndiGo had 304 aircraft in the March-end quarter and that has now risen to 330. However, the actual number of aircraft put in service is only around 300 due to problems connected with Pratt & Whitney engines. 

Air India and Vistara have seen marginal gains in their market share largely due to their capacity addition.

Together with AirAsia India, the three Tata group airlines held 26.5 per cent share in September. SpiceJet share dropped from 7.3 per cent in January to 4.4 per cent in September. Collectively, the Tata group airlines and IndiGo control nearly 90 per cent of domestic market share.


On the international side, market shares are more evenly distributed among airlines. Foreign airlines hold 56 per cent of India’s outbound traffic but the share of Indian carriers is rising. 

Indian carriers had a share of 39.1 per cent in April–June quarter in CY 2018 ( a year before Jet Airways closure) and that grew to 44 per cent in the same quarter in CY 2023. Here again IndiGo is the biggest gainer. Over the last five years, its international market share has risen from 6.2 per cent to 17.2 per cent making it single largest airline on international routes. 

“International connectivity is a paramount focus and a cornerstone of our growth strategy. We now offer access to 32 international destinations across Central and South-East Asia, Africa along with the West Asia. To expand our reach we have strategic codeshare partnerships with eight international airlines that have further enhanced our global presence,” Vinay Malhotra, IndiGo’s head of global sales said last week. 

Air India, too, is scaling up fast. Its CEO and Managing Director Campbell Wilson disclosed that Air India group airlines will receive one aircraft every six days from now till end of 2024. Last week it took delivery of another Boeing 777-300ER aircraft with an upgraded cabin. The aircraft will be deployed on the Mumbai-London Heathrow route. 


According to aviation consultancy CAPA India, Indian airlines have historically been unprofitable with accumulated losses of $7.9 billion (excluding Air India) between FY2010 and FY2023 of which $3.1 billion was prior to the Covid-19 pandemic. 

Among other things the losses have been a result of airlines’ inability to recover costs. Consolidation can bring pricing discipline but will it result in improved profits? Opinions differ. 

“Consolidation creates better economics and pricing power but in a fast growing less mature market it is not a certainty.

“The competitive intensity between the top 2-3 carriers is very high across market segments which may continue to impact pricing power and profitability. Capacity induction by the largest players is likely to be 3x of GDP growth (and in certain cases 4x) which in turn may undo the potential benefits of consolidation,” CAPA India said in its briefing earlier this month.  

The consultancy believes increasing ancillary revenue is critical for airlines. Sustained profitability is not feasible unless airlines have strategic focus on ancillary revenue, it said. 


Jagannarayan Padmanabhan, Director, CRISIL, offers a different take. 

“Globally, most developed aviation markets have moved towards consolidation/oligopoly with a few regional differentiated players. Consolidation aids in airline profitability as wanton discounting is avoided. Consolidation generally leads to a rise in fares. Fares in India have been unsustainably low. Ticket prices have declined over the years despite inflation,” he said.    

“IndiGo has imposed a fuel surcharge to tide over increasing fuel prices. Other airlines could follow suit. We expect operating profits of Indian carriers to be better than last year aided by healthy passenger numbers and yields,” Padmanabhan added. 


Collectively, Indian carriers posted an operating profit of ₹117 crore in FY23 based on provisional numbers shared by the civil aviation ministry to the Lok Sabha in July.

On a net basis, all the major airlines with the exception of Air India Express made a loss last fiscal. Tata group-owned airlines collectively lost ₹15,532 crore in FY23 and the loss widened due to ₹5,000 crore provisioning by Air India. 

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IndiGo registered a net loss of ₹305 crore in FY23 but loss saw a sharp 95 per cent cut due to an upswing in revenue. Akasa Air which began operations last August registered a net loss of ₹744 crore.

Airlines are expected to perform better in FY24. Rating agency ICRA has maintained a stable outlook on the Indian aviation industry with the continued recovery in air traffic and improved pricing power of carriers.


ICRA expects the pricing power to continue amid the recent surge in jet fuel prices. On a year-on-year basis, aviation turbine fuel (ATF) prices have declined but continue to trend higher in comparison to FY20. The average ATF prices stood at ₹98,892 per kilolitre in the first six months of FY24 which was 53 per cent higher than the average price in FY20but 18 per cent lower compared to FY23.

Domestic air traffic will witness 8-13 per cent growth in FY24 to reach 150-155 million thereby crossing pre-pandemic level. Similarly, industry wide net loss will reduce to ₹3,000-5,000 crore in FY24 from an estimated ₹17,000-17,500 crore in FY23, the rating agency said in September.