According to DGCA’s October 2024 report, domestic air passenger traffic increased by 5.3%, with 1.36 crore passengers flying across the country. This growth highlights the rising aspirations of common citizens and their increasing reliance on air travel for convenience and connectivity.

IndiGo’s Dominance Continues

IndiGo, the country’s largest airline, carried 86.40 lakh passengers in October 2024, achieving a market share of 63.3%. This dominance underlines IndiGo’s ability to provide efficient services and wide network coverage, making it the preferred choice for many travelers.

Tata Group’s Transformative Mergers

Air India and Vistara have also played a significant role in the domestic aviation sector. In October, Air India and its subsidiary AIX Connect merged with Air India Express, forming the airline’s low-cost arm. Similarly, on November 12, Vistara, previously a joint venture between Tata Sons and Singapore Airlines, merged into Air India, creating a stronger, unified full-service carrier.

Combined, Air India (including Air India Express) and Vistara accounted for 28.5% of domestic passenger traffic in October 2024. The consolidated Tata Group airlines are now poised to provide both luxury and budget-friendly options to Indian flyers.

Performance of Other Airlines

Other airlines also contributed to the sector’s growth.

• SpiceJet: 3.35 lakh passengers, securing 2.4% of the market share.
• Akash Air: 6.16 lakh passengers, with a 5.4% market share.

On-Time Performance

Major airports like Delhi, Mumbai, Bangalore, and Hyderabad recorded the highest on-time performance at 71.9%, ensuring smoother experiences for passengers.

India’s aviation industry is not just about numbers but also about evolving strategies and meeting passenger demands. The rising domestic air traffic, coupled with significant airline mergers, reflects a transformative phase for the sector, bringing air travel closer to the common man’s reach.

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This strategic consolidation brings the Tata-owned Air India Group to include three major brands: Air India, AIX Connect (formerly AirAsia India), and Vistara, with Singapore Airlines retaining a 25.1% stake in the newly combined entity. With this merger, Air India, along with budget airline giant Indigo, will control over 90% of the Indian market share.

The consolidation of full-service carriers is an indicator of the intense competition and financial challenges facing the industry. In the past decade, the Indian market had five full-service airlines, but the combined effects of rising operational costs, market competition, and the financial strain have led several airlines, including Kingfisher, Jet Airways, and Go First, to cease operations. Despite rising passenger traffic at a rate of around 15% and expanding airport infrastructure, the sector has struggled to achieve profitability, with only Indigo showing sustained financial stability.

Operational disparities also remain within the Air India Group post-merger. A key concern among pilots is the unresolved difference in retirement age limits, with Air India pilots retiring at 58 while Vistara pilots retire at 60. Addressing this difference will be crucial as the group navigates the integration of its workforce.

India’s aviation sector is now heavily consolidated with limited competition in the full-service space, yet the industry remains hopeful as it adapts to meet the demands of a rapidly growing market.

The post Vistara Merges with Air India: India’s Aviation Sector Sees Major Consolidation, Leaving Only One Full-Service Carrier appeared first on Vizag One.