The skies above India are about to get a lot busier as international carriers add more routes to the world’s most-populated nation to make up for tepid transatlantic demand that’s come under pressure from global economic uncertainties. Foreign airlines and the biggest Indian operators announced a range of plans at the International Air Transport Association annual general meeting in New Delhi this week to start or increase services to and from the South Asian nation. Delta Air Lines Inc. plans to begin non-stop services from its hub in Atlanta to New Delhi, and the airline also announced a code-sharing pact with low-cost specialist IndiGo, alongside partners Air France-KLM and Virgin Atlantic Airways Ltd. Now under private ownership, Air India Ltd. as well as market leader IndiGo are planning their own major international pushes. Air India has placed orders for 570 planes from Airbus SE and Boeing Co. since 2023 and IndiGo has an order book for more than 900 Airbus planes, including a recently expanded purchase of 60 A350 widebody aircraft.
India is already the world’s third-largest domestic aviation market and the country’s rising middle class makes the nation of more than 1.4 billion people a crucial driver of future growth. The upbeat outlook contrasts with caution about global travel demand as US President Donald Trump’s tariff uncertainties prompt households to rein in their spending. “It’s hard to find a more exciting market right now than India,” Shai Weiss, the chief executive officer of Virgin Atlantic, said in an interview in New Delhi. “It’s going to be a tough market in the beginning, it’s going to be well competed, but we’re betting on the next 30 years.”
With the focus on the Indian market intensifying, some in the industry have expressed concerns about a possible race to the bottom as airlines undercut each other to fill seats. That risks resulting in excess capacity and ever thinner margins for carriers.
Still, those fears may be overblown as any market asymmetry typically works itself out, according to British Airways CEO Sean Doyle. In addition to the large Indian diaspora in the UK, the airline is looking to tap the huge number of travelers from India to the US, he said. “Sometimes you may get an imbalance, where capacity comes ahead of growth,” said Doyle, whose airline operates 56 flights a week to India. “But then demand catches up because you’ll never get an even correlation. There’s a lot of opportunities for direct services.” IndiGo has emerged as a major winner of the push by foreign firms into the market, inking partnerships with some of the global industry’s biggest names. At an event in New Delhi on Sunday, Delta Air, along with its partners Virgin Atlantic and Air France-KLM, announced plans to increase code shares with India’s biggest airline. IndiGo, which hosted this year’s IATA AGM, also has codeshares with Qantas Airways Ltd., British Airways and Japan Airlines Co. When asked about whether IndiGo will more do work exclusively with Delta, Virgin and Air France, CEO Pieter Elbers said “we’ve passed the stage of dating, but we’re not at the stage of marriage.” Still, India’s tightly regulated aviation sector presents a major hurdle for foreign airlines wanting to expand. Flight rights to the country are based on so-called bilateral agreements that determine the number of seats carriers can operate on a reciprocal basis. The policies risk hindering India’s aspirations to become a global player and should be revised, according to Emirates, which is restricted from adding to capacity into India. “Hopefully that’ll change when they perhaps realize that the significance, the criticality, of their transport as a wealth multiplier for their own economy,” said President Tim Clark. “It’s quite clear that not to do that will only shoot yourself in the foot in the end. But it’s up to the Indian government to decide what they want to do on that.”