IXIGO confirms that Airfares shall reduce with Capacity additions in the second Half of FY25

Ixigo, a travel tech company, is anticipating a cooling off of airfares due to capacity additions in the second half of FY25

Aloke Bajpai, Ixigo’s chairman and CEO, explained that lower airfares would shift more train passengers, particularly those in second and third AC, to air travel. This shift is expected as the market remains underpenetrated, with only 4% of the population flying. Ixigo, holding a 52% share in the online train travel market and smaller shares in flights (5.3%) and buses (12.9%), aims to capture a larger share of the air travel market. The Indian air travel market is among the fastest-growing globally. In FY23, airports handled 32.7 crore passengers, nearly reaching pre-COVID levels of 14.1 crore domestic travelers in FY20. Bajpai predicts rapid market growth with over 1,000 aircraft on order, expecting the market size to triple once these aircraft are delivered.

Airlines like Indigo and Air India have placed significant orders, with Indigo set to add one aircraft weekly and Air India planning deliveries over the next five years. Indigo’s order of 500 aircraft is the largest ever by a single airline, while Air India has firmed up orders for 250 Airbus and 220 Boeing planes, including a mix of widebody and narrowbody aircraft. These additions are crucial for market expansion especially Ixigo, with the Indian fleet projected to reach 1,200 aircraft by 2027. However, timely deliveries depend on manufacturers like Boeing and Airbus, with potential disruptions such as China’s export restrictions on aviation components posing challenges. Ixigo’s IPO for its parent company, Le Travenues Technology, will debut on Dalal Street on June 10. The company aims to leverage the expected capacity expansions and the subsequent stabilization of airfares to attract more users from the train travel segment to flights, thereby accelerating its growth in the air travel market.