Airport Intelligence Series
India Passenger Traffic Market Deep Dive
July 2025
Passenger traffic levels in India have surpassed its pre-COVID benchmark, with total passenger traffic clocking 412 million in 2025 [1], a 20 percent increase compared to 2019. India represents the third busiest domestic O-D market.
Where do we go from here? 2.5x growth to 1+ billion passenger volumes by 2040.
There are several scenarios that could play out on the back of anticipated economic growth, air travel penetration, emerging geopolitical and trade barriers. Each of these scenarios generate a very different set of numbers in a 15-year time frame from today. The moderate growth scenario (also referred to as the diversification scenario) or where Indian carriers will continue to tap new markets and propensity to fly will substantially increase in the next 10 years.
In the diversification scenario, Avinia Labs projects a robust growth in passenger demand at an India wide level on the back of record fleet orders and expansion of airport infrastructure.
The passenger volumes will be a tad over 1 billion passengers in 2040, reflecting a CAGR of 6.6 percent from 2025 to 2040. Near-term growth is projected to be robust, with a CAGR exceeding 8 percent through 2030, pushing India wide annual passenger volumes to 600 million.
The diversification scenario assumes structural transformation in the aviation landscape, with significant airport infrastructure investments in non-metro regions and increasing passenger willingness to fly.
The supply side tells a slightly different story based on confirmed aircraft orders. The commercial fleet has grown at a 7.6 percent CAGR over the past decade, reaching over 860 aircraft as of December 2024[2].
As of January 2025, Indian airlines had collectively placed gross orders for 1,800 aircraft [3]. The net additions (excluding wet leases) by 2030 are expected to be around 600+ aircraft assuming a standard rate of retirements. This addition could increase the supply by about 1.2 million additional domestic air traffic movements (ATMs).
As can be seen in the chart above, the supply trajectory tracks above the demand trajectory for the moderate growth scenario by about 100 million passengers annually. This surplus supply is a theoretical construct.
The surplus provides the industry with operational flexibility, the ability to open new routes, and room to absorb future demand shocks.
Over time, supply is expected to adjust in line with demand, driven by India’s highly elastic demand–supply pricing dynamic. However, if demand outpaces expectations and leads to higher load factors, the resulting shortfall may be addressed through interim solutions, similar to the contingency measures implemented last year in response to engine-related groundings.
Analysing demand-side forecasts alongside supply-side investments at the national level provides stakeholders with a strategic lens to guide infrastructure development, fleet planning, and capital allocation over the next 15 years. The logical next step would be to drill down to the regional level to identify specific demand–supply gaps that state or regional authorities could address. We plan to explore this in future editions of the newsletter.
We would love to get your feedback on the numbers.
