India has firmly established itself as the world’s third-largest aviation market in terms of passenger traffic (Photo: India Outbound/ Garima Sharma)
With who’s who of the global civil aviation industry in attendance, the 81st Annual General Meeting (AGM) of International Air Transport Association (IATA) and the World Air Transport Summit (WATS) kickstarted on June 1 at Bharat Mandapam exposition centre in New Delhi.
The annual civil aviation meet has returned to India after a gap of 42 years and the difference in the civil aviation market in the past four decades was felt by all present at the meeting.
That was also the first item on the agenda as the AGM started with an indepth briefing on the Indian civil aviation market and its evolution in the past four decades, notably since the turn of the century.
The session, led by Amitabh Khosla, Country Director for India, Nepal, and Bhutan, IATA, provided a comprehensive overview of the current state and future potential of Indian aviation.
Khosla highlighted India’s emergence as a global aviation powerhouse, detailed the sector’s economic impact and addressed key priorities and challenges facing the industry.
In his briefing Khosla highlighted that India has firmly established itself as the world’s third-largest aviation market in terms of passenger traffic, encompassing both domestic and international segments. It also ranks as the sixth-largest market for air cargo, reflecting its growing importance in global trade and logistics.
The session mentioned that major investments in airport infrastructure are underway, particularly at gateway airports such as Delhi, Mumbai, Hyderabad and Bengaluru. Notably, two new airports, namely Navi Mumbai and Noida International, that are set to become operational soon, creating second airports for Mumbai and Delhi, respectively and significantly ramping up national airport capacity.
Beyond airlines and airports, the session also discussed how India’s broader aviation ecosystem was evolving, with increased focus on air cargo, aircraft leasing and the Maintenance, Repair, and Overhaul (MRO) sector.
According to the latest IATA economics report released during the briefing, the sector supports 7.7 million jobs and contributes USD 53.6 billion to the country’s GDP, accounting for 1.5 pc of the total Indian economy. However, IATA says that the benefits of aviation extend beyond these figures. Enhanced air connectivity drives competitiveness, productivity, investment, tourism and trade, all of which are vital for sustained economic development.
The briefing talked about on the consumer front, India has made notable progress in areas such as passenger rights and journey facilitation. Khosla emphasised the need for India to ratify the Montreal Protocol 2014 to strengthen international deterrents for unruly passenger behaviour.
The report highlighted that affordability remains a key issue, but competition has driven down airfares significantly and that as of 2025, domestic and international average airfares were approximately 79 pc and 62 pc of their 2011 levels in real terms, respectively.
However, IATA signalled that India remained a high-cost environment for aviation, largely due to complex taxation and regulatory uncertainties. Airlines continued to grapple with frequent tax notices and evolving interpretations of GST, as seen in the recent 2024-25 notices issued to international leasing companies, a cost that ultimately impacts Indian carriers, says IATA.
Regulation of airport infrastructure was another key area of discussion. The Airports Economic Regulatory Authority of India (AERA) plays a pivotal role in ensuring consumer-focused outcomes and competitive practices. Khosla called for strengthening AERA’s institutional capacity and resources to match the demands of a market of India’s scale. The establishment of a service level framework linking airport charges to service quality is a recent positive development.
Slot allocation and airspace management in India were also discussed. The establishment of coordination committees at level three slot-coordinated airports, in line with global and national guidelines, is seen as essential for efficient operations. Mumbai International Airport’s recent efforts in this regard were commended, particularly in managing disruptions caused by the temporary closure of Terminal 1. The Airports Authority of India (AAI) was also lauded for its effective management of a recent surge in air traffic over the Arabian Sea, caused by the recent India-Pakistan conflict, which led to traffic in the Mumbai FIR increasing by 25 pc and oceanic traffic by 60 pc overnight.
Khosla noted that domestic Sustainable Aviation Fuel (SAF) production is expected to commence by 2026, with Air India and Indian Oil already onboarded to IATA’s CADO SAF Registry. A recent agreement between India’s National Accreditation Board for Certification Bodies (NABCB) and the International Sustainability and Carbon Certification (ISCC) organisation is set to facilitate robust SAF certification.
India’s aviation sector has drawn attention for its handling of profit repatriation and travel agent refunds, particularly in comparison to challenges faced in other markets.
“Regarding repatriation of profits, there have been no issues for airlines operating in India; airline head offices have not faced difficulties in transferring proceeds from Indian sales abroad. While some countries present challenges, India is not among them. As for travel agent refunds, IATA’s Billing and Settlement Plan (BSP) system facilitates airline ticket sales and related financial transactions for Indian travel agents. Recent refund issues were isolated incidents involving bilateral matters between specific travel agents and airlines, which were monitored by Indian authorities. IATA was not directly involved in resolving these particular cases, as they were not systemic or widespread concerns,” Khosla told India Outbound.
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