India soars to 3rd spot in global aviation market, says IATA

Time of India

2 days ago

India's aviation sector has surpassed pre-pandemic levels and now ranks as the third-largest aviation market in the world in terms of
passenger traffic
, according to the International Air Transport Association (IATA).
However, the global airline body has flagged rising costs and tax-related uncertainty as critical challenges for the industry.
'It (India) is now the third largest aviation market in the world in terms of passenger traffic, which includes both India's domestic as well as international traffic. It is also the sixth largest market for air cargo, and overall, a very exciting aviation market like I mentioned, which is on account of the emergence of stronger airlines which are growing its connections both within and outside of India,' said Amitabh Khosla, Country Director – India, IATA, speaking on Sunday at the IATA AGM 2025 in Delhi.
According to IATA's report, as of December 2024, the international sector is almost 20% above its 2019 level, while domestic is more than 8% higher. 'Such a positive recovery reaffirms the strong demand within India for both domestic and international air travel and provides a firm foundation for the period ahead.'
However, it cautioned that the positive outlook does not come without its challenges – for the airlines, its industry partners and policymakers alike – to ensure that this growth potential can be met, and the available benefits of aviation accrue fully to the country and its citizens.
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'Airline profitability is not guaranteed, and the wider regulatory environment must support
sustainable air transport
growth within the country. In particular, conversations regarding infrastructure development, taxation, labor and skills challenges, and ensuring climate change and sustainability considerations are addressed, are all required to secure a positive future for the industry and, in turn, the country.'
Khosla added that the body hoped that the issue of the high cost environment for aviation in India that could be addressed, especially for taxation, where in general, there is a higher degree of uncertainty for tax planning that funds have to bear in mind there continue to be various issues around GST that still need clarification.
'There are positions that are taken by the tax authorities in India, or frequent tax notices on untested and new issues, for example, in 2023–24 you would recall there was this earlier contrary position taken about GST on import of services between airline headquarters and their branch offices in India, which to great credit to the tax authorities has finally been addressed in line with international principles. But in more recent months, end of 24 and beginning of 25 there is this other instance of notices being issued to some aircraft leasing companies where there is an expected cost impact which will have to be borne by the Indian carriers,' Khosla said.