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VIDEC Consultants, an India-based travel research and M&A advisory firm, has released insights from its latest India Travel Market Opportunity, FY22-FY27 study.
VIDEC undertook independent, rigorous and unbiased research covering air, hotel, alternate accommodations, rail and intercity bus categories, with an emphasis on Indian outbound and the role of online travel intermediaries. The research employs a highly complex demand-side methodology to accurately assess the true potential of India’s travel market.
India recorded 220 million air passengers in FY24, a 16% increase from 190 million in FY23. With over 3,200 daily domestic and 625 daily international departures in December 2024, India is the world’s third-largest aviation market. As of December 2024, India has the largest aircraft order book, with over 1,700 new aircraft—twice the size of its current fleet exceeding 825 aircrafts. The country’s airport infrastructure has also expanded significantly, growing from 74 operational airports in 2013 to 157 in 2024. Nearly 80 more airports are expected within the next five years.
The key findings from the study are:
- Growing at a CAGR of 13.7% between FY24 and FY27, air is the fastest-growing travel category, projected to reach ₹333,000 crores ($40.4 billion).
- The international segment accounted for 30% of India’s total 220 million flown passengers in FY24. Valued at ₹140,000 crores ($16.9 billion), it represents 60% of India’s total air GBV, making it the most valuable category.
- The domestic air market, valued at ₹88,000 crores ($10.6 billion) in FY24, is the second-most penetrated category after rail. With over 80% market share, OTA is the predominant online distribution channel for domestic air.
- Traditional channels prevail in international air distribution owed to the complexity, high price, visa requirements and the cultural affinity for a human touchpoint.
Air is the beloved category for OTAs, generating ₹70,000 crores ($8.5 billion) in air GBV in FY24—accounting for 60% of total OTA GBV. With nearly 58% share, MakeMyTrip Group led the Indian air OTA market grossing ₹40,800 crores ($4.9 billion) in GBV. Air-heavy OTAs Cleartrip and EaseMyTrip followed consecutively, with air contributing over 90% of their total GBV. Yatra was the fourth largest air OTA, distinguished by its higher mix of corporate bookings compared to leisure. Meanwhile, ixigo—primarily a ground-focused OTA—emerged as the fastest-growing air OTA, with its air category expanding 75% annually.
Commenting on the key trends, Virendra Jain, CEO and co-founder of VIDEC, said, “India’s aviation sector continues to soar, operating at high load factors of nearly 90% while sustaining high airfares—clear evidence of robust consumer demand. On November 17, 2024, we marked a historic milestone with 5 lakh domestic passengers in a single day, setting a new lifetime high.
India was never a hub. It has started looking as one, a connector between Middle East and SEA/Orient, especially owed to the blue collar workforce and religious travel. For us to achieve multi-fold growth, Indian aviation needs to do what Emirates did in conjunction with Dubai as a destination. Amidst all this, Indigo’s aspirations to deploy wide bodies and sizably increase their medium to long haul routes could be the catalyst Indian aviation needs.”
India’s aviation sector is dominated by a duopoly, with IndiGo and the Air India Group (Air India & Air India Express) controlling 90% of domestic traffic. On the international routes, India had 67 million passengers in FY24 vs.54 million FY23. Both these carriers grew by 38% and 31% respectively, outpacing India’s growth on international routes.
Mergers typically take two to three years for full integration of technology, operations, and human resources. With the Vistara and AirAsia India brands phased out, Air India Group now operates a streamlined dual-brand strategy—one full-service and one low-cost carrier. Tata Group’s next moves will play a pivotal role in shaping the future of Indian aviation.
India is set to reach 30 million outbound passengers in 2025, yet as the world’s largest adult population, its potential remains vastly untapped. In comparison, China recorded 155 million outbound travelers in 2019. This contrast underscores India’s immense growth opportunity and is a testament to the power of its demographic dividend.
