West Asia accounts for nearly 40% of India's international air traffic: IATA

The conflict in West Asia is a big blow to the international air traffic from India, with Gulf countries accounting for about 39.2% of international traffic. Some domestic carriers have as high as 80% exposure to these markets.   

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West Asia was the largest destination region for international O-D (Origin Destination) passenger traffic flying from India in 2024, with a market share of 39.2% or 14.9 million passengers, according to IATA Value of Air Transport to India, 2025.

It is a key labour migration corridor as lakhs of Indians work in the United Arab Emirates, Saudi Arabia, Oman and Qatar, resulting in constant demand for flights round the year. India is also a key hub for Middle East carriers, and they have been asking for an increase in bilateral rights.

West Asia remains a key market for domestic carriers, with reports saying SpiceJet, Air India Express and Akasa having over 80% of O-D international passenger traffic from the Gulf.  

Asia Pacific follows second at 29.9% (11.3 million passengers), with Europe and North America accounting for around 15.5% (5.9 million) and 12.6% (4.8 million), respectively. At a country level, the United Arab Emirates (UAE) stands out as the largest international destination, with approximately 7.6 million arriving O-D passengers from India in 2024, accounting for 19.9% of the total.

The UAE is followed by the United States, with around 3.5 million passengers, capturing a 9.2% share of the market, and demonstrating the economic interconnectedness between India and these two nations. Saudi Arabia follows closely as the third largest market, with nearly 3.4 million passengers, and a 9% market share, driven by both business and religious travel.

Challenge

The West Asia crisis has led to the cancellation of flights to the region, with only selective operations being allowed to evacuate stranded Indians. This has also led to a sharp rise in airfare for flights originating from Dubai, Riyadh, Muscat and Doha.

Air passenger demand is sensitive to price. Further, airlines operate on narrow profit margins and are particularly vulnerable to increases in operational costs, which can threaten their financial sustainability and the ongoing provision of air transport services.

Aviation fuel constitutes approximately 40-50% of an airline’s operational expenses in India, well above the global average. In India, this expense is subject to an increased tax burden, which further inflates costs, making it difficult for airlines to achieve profitability and maintain network operations.

“An excessive tax or administrative burden can render routes unprofitable, and operations could cease in those cases. In turn, this could result in the favourable industry growth outlook being curtailed, with related implications for wider economic activity and jobs,” said IATA.

In a big relief, the Indian government implemented a standardized 5% Goods and Services Tax (GST) on aircraft and engine parts in July 2024, a notable reduction from the previous range of 5% to 28%.