In this February 2025 edition of our newsletter, we bring you a concise analysis of the rapid growth in India's civil aviation sector, now the world's third-largest domestic market. As the industry evolves to improve connectivity, enhance operational efficiency, and embrace sustainability, we highlight key regulatory changes, major infrastructure approvals, and recent legal precedents that are shaping the future of aviation in India and globally.
We hope this issue offers valuable insights as we continue to track the latest developments and opportunities in this dynamic sector.
A. Key Updates – India
(a) ICRA reports losses in Indian Aviation Industry
February 28, 2025- ICRA projects that the Indian aviation industry will incur a net loss of Rs. 20-30 billion for FY2025 and FY2026, which is an improvement compared to earlier estimates of Rs. 30-40 billion. The industry currently has an order book of 1760 aircraft, although deliveries are expected to span over the next decade. Additionally, as of February 25, 2025, 117 aircraft were grounded across select airlines, representing 13-15% of the total fleet. However, this figure has improved since September 30, 2023 and it is expected to continue improving by March 31, 2025, with further improvements anticipated for FY2026.
Source: ICRA Report
(b) Domestic air traffic record rises by 11.28%
February 27, 2025- As per the Directorate General of Civil Aviation ("DGCA") Monthly Report for the month of January 2025, domestic airlines carried 146.11 lakh passengers, compared to 131.30 lakh passengers during the corresponding period of the previous year. This substantial growth represents an increase of 11.28% in both annual and monthly growth. The report also recorded the market share of scheduled domestic airlines with Indigo capturing the largest market share, followed by the Air India Group, Akasa Air and SpiceJet.
Additionally, in January 2025, a total of 973 passengers lodged complaints against airlines. These complaints were related to various issues, including fares, refunds, flight problems, baggage handling, customer service, disability assistance, and catering. The highest number of complaints were lodged against Fly Big, followed by Alliance Air, SpiceJet, Fly91, Star Air, the Air India Group, Akasa Air, Indigo, and Indiaone Air.
Source: DGCA Website
(c) IndiaGo signs damp Lease agreement with Norse Atlantic Airways
February 26, 2025- IndiGo has signed a damp lease agreement with Norse Atlantic Airways for three Boeing 787-9 aircraft. The initial term of the lease can be extended for up to 18 months, depending on regulatory approvals. This agreement increases IndiGo's leased fleet from Norse Atlantic Airways to a total of four aircraft and aims to cater to the growing demand for international travel.
Source- Air India, news report
(d) Advancing Aviation Safety and Security ("ALPA") raises concern over high training costs for trainee pilots
February 24, 2025- ALPA is a member associate of the International Federation of Airline Pilots' Associations and has raised concerns regarding the high costs associated with pilot training in India. According to a letter sent by ALPA to Civil Aviation Minister K. Rammohan Naidu, airlines are allegedly charging trainee pilots amounts far exceeding the actual costs required to complete a pilot training program. ALPA has stated that these inflated fees not only place a significant financial burden on aspiring pilots but also constitute an unethical practice that exploits their ambitions for profit.
ALPA further warns that the rising training costs could have serious long-term consequences for India's aviation sector. The association has called on the Ministry of Civil Aviation to step in and regulate these fees, ensuring that pilot training remains affordable, transparent and ethical, to support the sustainable growth of the aviation industry while safeguarding safety and security standards.
Source: 100 Knots
(e) Union Minister of Civil Aviation launches digital license for Pilots
February 20, 2025 - The Union Minister of Civil Aviation has announced the launch of the Electronic Personnel License ("EPL") for pilots in India. With this advancement, India becomes the second country globally to implement this system, after receiving approval from the International Civil Aviation Organization ("ICAO"). The introduction of the EPL is part of ICAO's Amendment 178 to Annex 1, which encourages Member States to adopt electronic licenses to improve security and efficiency. The Union Minister also emphasized the growing demand for approximately 20,000 pilots in the near future.
Source- Press Information Bureau
(f) Boeing ties up with HPCL for Sustainable Aviation Fuel Ecosystem
February 28, 2025 - Boeing has announced a partnership with state-owned HPCL to develop a sustainable aviation fuel ("SAF") ecosystem in India. The collaboration aims to scale up the production of SAF in the domestic market, support the certification of locally produced SAF and advocate for policies that strengthen the SAF ecosystem in the country. This partnership comes as India is recognized by the International Air Transport Association ("IATA") for its potential to be a key SAF producer, leveraging its ethanol supplies and non-edible industrial oils.
HPCL is actively working on the commercialisation of SAF, focusing on its development and production. This partnership aligns with India's broader efforts to reduce emissions, as Indian airlines have already operated flights with a blend of SAF and traditional aviation turbine fuel (ATF), marking a significant step toward sustainable air travel.
Source: Economic Times
(g) GMR Airports joins UN Global Compact
February 3, 2025 - GMR Airports Limited has announced its membership in the United Nations Global Compact, reinforcing its commitment to corporate sustainability. By joining the UNGC, GMR Airports pledges to align its operations and strategies with the Ten Principles of the UNGC, which focus on human rights, labor, environment and anti-corruption, as well as to advance the Sustainable Development Goals. The company operates airports in Delhi, Hyderabad, Goa and Medan (Indonesia) and is involved in airport development projects in Bhogapuram (Visakhapatnam) and Crete (Greece).
Source: Economic Times
B. Key International Updates
(a) ANA holdings make record-breaking aircraft order
February 25,2025 – Japan's ANA Holdings has placed a historic order for up to 77 new aircraft, valued at 2.1 trillion yen (USD14 billion). The order includes 68 firm orders and 9 options, featuring 30 Boeing jets, 27 Airbus models and 20 Embraer aircraft, with deliveries slated from 2028 to 2033. This expansion aims to meet the surge in global and domestic travel, driven by Japan's booming tourism industry.
The deal marks Embraer's first major entry into Japan with its E2 regional jets, while also increasing competition for Airbus. ANA's diversified fleet strategy ensures it is poised to meet rising travel demands and strengthen its position as a global aviation leader.
Source: ANA Holdings Press Release
C. Significant developments
(a) AIR India and Lufthansa Group expand Codeshare Partnership
February 20, 2025- Air India and Lufthansa Group expand codeshare on 100 routes across the Indian Subcontinent, Europe, Australia and the Americas. It has also expanded codeshare agreement with Austrian Airlines and SWISS Airlines. Through Code share agreement between Air India, Lufthansa and SWISS, 60 additional routes across 12 India and 26 European cities have been added.
The expanded partnership significantly boosts flight options and connectivity for travellers between the Indian Subcontinent and Europe with the addition of close to 60 codeshare routes operated by the four airlines across 12 Indian and 26 European cities. The expanded agreements increase the total number of codeshare routes between Air India, Lufthansa and SWISS from 55 to nearly 100. Additionally, the new agreement between Air India and Austrian Airlines adds 26 codeshare routes. This provides greater choice, convenience, and seamless experiences to travellers from both regions.
Source: Air India, Media Report
(b) Union Budget 2025-2026 key highlights
February 1, 2025- The Union Budget Speech for 2025-2026 was delivered with a focus on strengthening India's economic growth, prioritizing sustainability and enhancing infrastructure. The finance minister outlined key measures aimed at fostering regional connectivity, digital innovation, and bolstering the aviation sector for long-term progress.
Key points in the Union budget 2025-2026
- Rs 2,400.31 crore is allocated to civil aviation sector which is nearly 10 percent lower compared to Rs 2,658.68 crore allocated in the revised 2024-25 Budget.
- Out of the total allocation for the next fiscal starting from April 1, 2025, UDAN will get Rs 540 crore which is 32 per cent lower compared to Rs 800 crore in the year-ago period.
- A modified UDAN scheme will add 120 new destinations and support regional connectivity for 4 crore passengers over 10 years.
- New Greenfield airports will be developed in Bihar, along with expansions at Patna and Bihta airports.
- The government will upgrade air cargo infrastructure and streamline cargo screening and customs protocols.
Source- Ministry of Finance website
D. Key Judicial Precedents
(a) DGCA informs Delhi HC on phased rollout of revised pilot duty norms
February 24, 2025 - The Directorate General of Civil Aviation ("DGCA") informed the Delhi High Court that revised pilot duty and rest hour norms will be implemented in phases, starting July 1, 2025, with the remaining regulations to be rolled out by November 1, 2025. The new norms aim to address pilot fatigue by increasing weekly rest periods to 48 hours and limiting the gap between rest periods to 168 hours. The court is hearing petitions from pilot associations challenging the revised flight duty time limitations.
Source- Economic Times
(b) Delhi HC directs Civil Aviation Ministry to address plea for enhanced aviation safety
February 19, 2025 - The Delhi High Court has directed the Ministry of Civil Aviation to address a plea by the Airline Users Rights and Grievance Redressal Forum, which raised concerns about India's passenger safety standards. The petition urges the Centre to align Civil Aviation Requirements with international regulations set by International Civil Aviation Organization and International Air Transport Association. It highlights gaps in training for managing dangerous goods and non-compliance with International Civil Aviation Organization guidelines, which could jeopardize safety. The court has instructed the Ministry to take appropriate action to address these issues.
Source- Economic Times
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