India's aviation industry revenues are expected to reach a record high of $979 billion in 2025

Revenues of India's aviation industry are expected to reach a historic high of $979 billion in 2025, according to a report compiled by the International Air Transport Association (IATA).

As per the report, the industry's net profits at $36.0 billion improved from the $32.4 billion earned in 2024, but were slightly down on the previously projected $36.6 billion (December 2024). 

The total traveler numbers reached a record high of 4.99 billion, over 4 per cent on 2024, but below the previously projected 5.22 billion. Total air cargo volumes reached 69 million tonnes, more than 0.6 per cent on 2024, but below the previously projected 72.5 million tonnes.

IATA's country director for India, Nepal, and Bhutan, Amitabh Khosla, said India's rise to the third rank in the global market comes on the back of stronger airlines, growth of connectivity, and increased airport infrastructure.

He described the aviation industry as a key driver of employment, economic activity, international trade and investment in the country.

India's aviation now accounts for 1.5 per cent of the country's Gross Domestic Product (GDP) and has created approximately 7.7 million jobs, both directly and indirectly, across the country, the report states.

Khosla said, “In 2023, the industry made a $53.6 billion contribution to India's economy, underpinning 7.7 million jobs in the country.”

Tourism, supported by aviation, contributes Rs 2,710 crore to the GDP. International tourists add another $29.4 billion annually to the economy through local purchases of goods and services. “Overall, the travel and tourism sector accounts for 6.5 per cent of the nation's GDP and 8.9 per cent of total employment in 2023,” he added.

The Middle East remained the top international destination for Indian flyers in 2023, with 13.7 million passengers, followed by the Asia Pacific region and Europe.

Outlook Drivers

Economic factors affecting airlines are traditionally driven by GDP. Nonetheless, airline profitability is anticipated to increase even if global GDP growth is predicted to decline from 3.3 per cent in 2024 to 2.5 per cent in 2025. The decline in oil prices is mostly to blame for this. It is anticipated that robust employment and moderate inflation forecasts would sustain demand growth, albeit at a slower pace than initially anticipated.

Efficiency is another significant driver of the outlook. Passenger load factors are expected to reach an all-time high in 2025 with a full-year average of 84.0%, as fleet expansion and modernisation remain challenging amid supply chain failures in the aerospace sector.

Overall, total revenues are expected to grow by 1.3 per cent, outpacing a 1.0 per cent increase in total expenses, shoring up industry profitability.