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Despite global challenges such as inflation, rising fuel prices, and geopolitical uncertainties, India's aviation ecosystem remains robust. Domestic air travel growth continues to surge, driven by affordability, regional connectivity schemes, and improved service offerings by legacy and low-cost airlines. The foundation of this growth lies in structural policy shifts, private and foreign investments, and government spending, all of which form the focus of this aviation newsletter.
From January to April 2025, the total number of passengers carried by domestic airlines reached 575.13 lakh, reflecting a significant rise from 523.46 lakh during the same period the previous year. This translates to an annual growth of 9.87% and a monthly growth rate of 8.45%. IndiGo maintained its lead with a year-to-date market share of 64.3%, while the Air India Group held 26.7%, Akasa Air 4.9%, and SpiceJet 2.9%. These figures underscore the domestic sector's strength and resilience, revealing how rapidly demand for air travel is growing across both major metros and tier-2 cities.
India's commitment to aviation infrastructure is evident in the sharp rise in operational airports—from just 74 in 2014 to 162 in 2025. Under the UDAN scheme and broader aviation policy in India, over 50 new airports are in various stages of planning and construction. These include major greenfield airport development projects like Noida International Airport and Navi Mumbai International Airport, both of which are scheduled to begin operations in 2025. Noida International Airport is being developed with advanced multimodal connectivity and is expected to handle up to 70 million passengers annually once fully built out. Meanwhile, Navi Mumbai International Airport will cater to an estimated two crore passengers annually, with integrated domestic and international terminals designed to global standards.
Digital transformation is also becoming integral to airport development projects in India. Key hubs such as Delhi, Hyderabad, and Mumbai are undergoing upgrades, including biometric security, AI-driven baggage handling, predictive air traffic control, and electric-powered ground services. These initiatives align with India’s sustainability goals while improving passenger experience and operational efficiency.
The MRO industry in India is undergoing a significant transformation, reducing dependence on overseas facilities and building domestic capability. The growing aircraft fleet, including over 700 planes currently in operation and hundreds more on order, is creating high demand for advanced maintenance services. Air India has already begun centralising its Continuing Airworthiness Management Organisation (CAMO) operations in the Delhi-NCR region, with approval for in-house interior modifications. Such steps reduce turnaround times and boost local employment and technical expertise.
The government's support has played a pivotal role in this shift. Lowering GST on MRO services to 5%, easing regulatory hurdles, and incentivising domestic capacity-building are all part of a policy effort to strengthen India’s aerospace backbone. The sector’s projected growth—from USD 900 million in 2022 to over USD 4 billion by 2031—demonstrates the potential of a strong MRO ecosystem. Investment in digital tools, predictive maintenance systems, and real-time diagnostics is further reshaping aircraft maintenance trends, improving safety and profitability.
Recognising the complexity and opportunity within India’s aviation ecosystem, Grant Thornton Bharat has developed a specialised airport financial advisory service to guide stakeholders through the full lifecycle of aviation projects. This includes transaction support for greenfield airport development, brownfield expansion, airport PPP advisory, and emerging aviation segments such as drone traffic management and urban air mobility corridors. The offering also extends to MRO project bids, airline maintenance contracts, and airport services such as cargo handling, in-flight catering, security, and IT infrastructure.
Grant Thornton’s solution rests on three interconnected capabilities: market assessment, financial modelling, and bid submission strategy. The advisory service empowers clients to submit winning, technically sound bids that are financially viable and strategically aligned with India's evolving regulatory frameworks through detailed traffic forecasting, competitive analysis, CAPEX/OPEX validation, and dynamic financial models. With this integrated approach, the firm positions itself as a consultant and a strategic partner for clients aiming to thrive in one of the world’s most promising aviation markets.
A combination of sustained government expenditure and growing foreign direct investment powers India’s aviation investment strategy. Public funding continues to flow into airport upgrades, air traffic management systems, and connectivity schemes such as UDAN. The government has also privatised several major airports under the PPP model and encouraged private participation in ground services, security, and catering.
Conversely, progressive policy frameworks and streamlined approval mechanisms have attracted record levels of FDI. In 2023 alone, total foreign inflows exceeded USD 71 billion, including significant investments in aircraft leasing, component manufacturing, and the MRO ecosystem. The passing of the Cape Town Convention-aligned legislation in 2025 is further expected to catalyse leasing and aviation finance investments. Together, these public and private capital flows are creating a synergistic growth cycle that strengthens India’s competitiveness on the global aviation stage.
India is looking ahead to the next frontier in aviation through airport funnel redevelopment and urban air mobility innovations. In Mumbai, recent policy changes allow the transfer of unused Floor Space Index (FSI) via Transferable Development Rights (TDR), encouraging mixed-use development around aviation-sensitive corridors. This model is also gaining traction in cities like Delhi and Bengaluru, where better land utilisation is helping revamp ageing infrastructure and stimulate local economies.
Urban air mobility is another exciting prospect. With a focus on electric vertical take-off and landing aircraft, cargo drones, and point-to-point connectivity, India could become a leader in sustainable urban aviation. While global pioneers like Volocopter and Lilium have faced funding hurdles, India’s regulatory openness and investment momentum provide a fertile ground for the next wave of mobility innovations. Success in this arena would ease traffic congestion, reduce emissions, and redefine last-mile connectivity in urban areas.
From rising passenger volumes and strategic fleet expansions to cutting-edge airport design and robust MRO capacity-building, the Indian aviation sector is writing a new chapter in global aviation. The scale of opportunity is immense. With the right advisory, investment, and policy support, stakeholders can play a decisive role in shaping this high-growth landscape.
For airlines, infrastructure developers, technology providers, and global investors looking to enter or expand within the Indian market, now is the time to act. Contact Grant Thornton Bharat today to discover how our end-to-end airport financial advisory solutions can help you soar in India’s vibrant aviation sector.
