Five years ago, India’s airline market looked very different.
Air India was government-owned, Vistara operated as a standalone carrier, Akasa Air had not yet entered the market and competition was distributed more evenly across multiple airlines.
Since then, India’s aviation industry has experienced one of the most turbulent periods in its history. The pandemic brought air travel to a standstill, airlines grappled with rising costs and supply chain disruptions, and several carriers underwent significant ownership, strategic and operational changes.
The market recovered, but the airlines did not emerge from the period in the same position. Some strengthened their market presence, others struggled, and one disappeared altogether. Established brands merged, new entrants emerged and market leadership became increasingly concentrated.
A Larger Market, A Different Landscape
Domestic passenger traffic in India reached 165.5 million in FY2024-25, surpassing the 141.2 million recorded before the pandemic in FY2019-20. While passenger traffic has recovered and exceeded pre-pandemic levels, the competitive landscape that emerged from the disruption looks very different from the one that existed five years ago.
India’s domestic aviation market has more than doubled over the past decade, growing from 70.1 million passengers in FY2014-15 to 165.5 million in FY2024-25.
The journey, however, has not been linear. Passenger traffic reached 141.2 million in FY2019-20 before collapsing to 62.1 million during the pandemic. Demand subsequently recovered, surpassing pre-pandemic levels in FY2023-24 and continuing to grow through FY2024-25.
Chart 1: India’s Domestic Passenger Traffic (FY2014-15 to FY2024-25)
A New Market Order
The recovery in passenger traffic is only part of the story. Beneath the headline growth, the industry’s competitive structure has undergone a significant transformation. The domestic market today looks fundamentally different from the one that existed before the pandemic.
Chart 2: India’s Domestic Airline Market – FY2019-20 vs FY2024-25. (Market share based on domestic passengers carried. RPK-based market shares reported by DGCA show a similar competitive structure.)
Five years ago, India’s aviation landscape was more fragmented, with multiple carriers competing for market share. Today, the industry has seen consolidation and is increasingly concentrated around two major aviation platforms: IndiGo and Air India. Together, IndiGo and the Air India Group account for more than 90% of India’s domestic passenger market, leaving a much smaller share for all other operators combined.
| FY2019-20 | FY2024-25 | |
|---|---|---|
| Airlines with >5% share | 6 | 3 |
| Airlines with >10% share | 4 | 2 |
| Largest airline share | 48.2% | 63.0% |
| Combined share of top two airlines | 63.8% | 90.9% |
The changes reflect a combination of industry consolidation and diverging competitive fortunes. Go Air exited the market, Vistara and AirAsia India were integrated into the Air India Group, Akasa Air emerged as a new entrant, and SpiceJet’s market share declined sharply. While passenger traffic recovered at the industry level, the benefits of that recovery were not distributed evenly across airlines.
The Airlines That Emerged Stronger
The clearest winner of the past five years has been IndiGo.
The airline carried approximately 68 million passengers in FY2019-20, representing 48.2% of the domestic market. By FY2024-25, passenger numbers had risen to more than 104 million and market share had climbed to 63.0%.
In other words, nearly two out of every three domestic passengers in India now fly with IndiGo.
The airline not only weathered the disruption better than most competitors but also strengthened its position relative to them. While rivals faced financial, operational and fleet-related challenges, IndiGo continued expanding its network and captured a disproportionate share of industry growth.
The Air India Group also emerged as a stronger second player.
Five years ago, Air India, Vistara, Air India Express and AirAsia India operated as separate entities. Following the Tata Group’s acquisition of Air India and subsequent consolidation efforts, these airlines have been brought together under a single aviation platform.
Today, the combined Air India Group accounts for more than one-quarter of India’s domestic passenger market. While still considerably smaller than IndiGo, it has emerged as the only airline group with the scale and network breadth to mount a meaningful challenge to the market leader.
Akasa Air, which did not exist five years ago, carried approximately 7.7 million passengers in FY2024-25 and captured 4.6% of the domestic market. In a relatively short period, it surpassed SpiceJet in passenger traffic and established itself as a credible new competitor in the market.
The Decline of Former Challengers
Not every airline benefited equally from the market’s return to growth.
Five years ago, SpiceJet was the second largest player in terms of passenger traffic. The airline carried approximately 22 million domestic passengers in FY2019-20, accounting for 15.6% of the market. By FY2024-25, passenger traffic had fallen to just 5.3 million and market share had declined to 3.2%.
The decline is particularly striking because it occurred during a period when overall passenger traffic expanded beyond pre-pandemic levels.
Go First’s story was even more dramatic. Once carrying more than 15 million passengers annually and accounting for over 10% of the domestic market, the airline eventually ceased operations and exited the industry altogether.
The pandemic and its aftermath accelerated existing competitive pressures within the industry, resulting in sharply contrasting fortunes for airlines. As carriers grappled with groundings, supply chain disruptions, rising costs and fleet constraints, access to capital and operational resilience became important competitive advantages. As a result, some emerged stronger, while others struggled to regain their footing even though passenger traffic recovered on an aggregate level.
New Challenges Ahead
The airlines continue to face a different set of challenges in 2026. Fuel price volatility, particularly in the context of a weakening rupee, continues to pressure costs for Indian carriers. Recent geopolitical tensions in the Middle East have added another layer of uncertainty to an industry already grappling with aircraft delivery delays, engine-related groundings and supply chain constraints.
The pressure is beginning to show in traffic data. According to International Air Transport Association (IATA), Global air travel demand contracted by 3.4% year-on-year in April 2026 in RPK terms, marking the first year-on-year decline in global passenger traffic since the industry’s post-pandemic recovery. India’s domestic market also recorded a 2.9% year-on-year decline during the month.
The next phase of Indian aviation promises to be equally interesting. IndiGo is pursuing an increasingly ambitious international strategy, the Air India Group is undertaking one of the most complex transformation and integration programmes in the industry, and newer players such as Akasa Air are seeking to establish a durable position in a market where more than 90% of domestic passengers now travel with either IndiGo or the Air India Group.
India, now the world’s third-largest domestic aviation market, remains one of the industry’s most watched growth stories. Yet the industry’s future will be shaped by more than passenger growth alone. A new market structure has emerged over the past five years, and how airlines navigate the opportunities and challenges that come with it will help define the next chapter of Indian aviation.
Also read:
Global Air Travel Demand Turns Negative in April as Slowdown Spreads Beyond Middle Eastern Carriers.
Air India Losses Overshadow Singapore Airlines Strong Operating Performance
Record Passenger Traffic, Yet a Loss: What Really Happened at IndiGo in FY26
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