India's Aviation Sector Set to Soar with Three New Airlines The new airlines have already received their No Objection Certificates (NOC) from the Civil Aviation Ministry
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
India's booming aviation sector is about to welcome three new homegrown airlines in early 2024, signaling a new era for domestic air travel. The country's civil aviation industry has been experiencing impressive growth, with passenger traffic surging by 23.57 per cent year-on-year (YoY) in 2023. This growth has largely been driven by an increase in domestic departures, making it a prime opportunity for new players to enter the market, as reported by CNBC Tv18.
The new Kerala based airlines, Air Kerala, Alhindair, along with Shankh Air from Uttar Pradesh, have already received their No Objection Certificates (NOC) from the Civil Aviation Ministry. They are now working toward obtaining their Air Operator Certificates (AOC), which will allow them to begin commercial operations on scheduled routes. Initially, these carriers will focus on enhancing regional connectivity within their states before expanding to broader, inter-state routes.
Once they establish themselves in the domestic market, Air Kerala and Alhindair aim to target the high-demand routes between South India and the Middle East, a region with strong travel ties due to the large expatriate community. This regional strategy allows the new entrants to build a strong foundation before competing on more established routes.
India's aviation market is ripe for expansion, with domestic air passenger traffic reaching 152 million in 2023, a sharp rise from 123 million in 2022. This surge reflects the country's growing middle class and increased air travel demand. Currently, the sector is dominated by IndiGo, which holds over 62 per cent of the market, and Tata Group airlines like Air India and Vistara, which account for nearly 30 per cent. The arrival of these new players could potentially reshape the competitive landscape, offering consumers more choices and potentially better pricing.
The recent grounding of Jet Airways in 2019 and Go First in 2023 had created concerns of a duopoly in the market, with IndiGo and Tata Group airlines controlling the majority share. However, with SpiceJet securing fresh capital and these new airlines set to enter the fray, competition is expected to intensify, giving a fresh boost to market sentiment.