Indian aviation is entering a decisive new phase. As demand for both domestic and international travel in and out of the country continues to surge, legacy full-service carriers and nimble low-cost operators are jostling for position. At the same time, Brazilian aircraft maker Embraer is rapidly deepening its footprint in India, betting that the country will become not just one of its most important sales markets, but also a critical node in its global supply chain. The intersection of these trends is beginning to reshape how Air India, Emirates, Qatar Airways, IndiGo and SpiceJet plan their networks, fleets and strategic partnerships across one of the world’s fastest-growing aviation markets.
India’s Skyward Demand Reshapes Global Airline Strategies
India has firmly established itself as the world’s third-largest domestic aviation market by seating capacity and one of the fastest growing, with domestic passenger volumes now well above pre-pandemic levels. Recent data from India’s aviation regulator shows that domestic airlines carried roughly 1.4 to 1.45 crore passengers in peak months of 2025, representing high single-digit to double-digit year-on-year growth. That momentum is expected to continue into the 2026 financial year, supported by rising incomes, expanding tourism, and a steady shift from rail to air on key trunk routes.
The competitive landscape, however, is far from fragmented. Market share is heavily concentrated, with IndiGo commanding over 60 percent of the domestic market on several recent monthly tallies, while the Air India group, including Air India Express, has climbed to the high twenty percent range. Other players, including Akasa Air and SpiceJet, carve out single-digit shares. This consolidation gives leading carriers significant pricing and capacity power, but it also raises the stakes for network decisions and aircraft choices as they look to serve growing secondary and tertiary cities.
On the international side, India’s outbound and inbound markets have become critical growth engines for global network carriers. Gulf-based airlines, notably Emirates and Qatar Airways, have long relied on India to feed their hubs in Dubai and Doha with both premium and price-sensitive traffic destined for Europe, North America and Africa. With India’s middle class expanding and corporate travel gradually normalizing, these carriers are refining their India strategies with new routes, additional frequencies and upgraded aircraft, even as Air India seeks to repatriate some of that long-haul demand to its own hubs.
Against this backdrop, aircraft availability has emerged as both an opportunity and a bottleneck. Global supply chain constraints and production caps at major manufacturers slowed aircraft deliveries in 2025, but Indian carriers still added close to 90 new aircraft, and industry forecasts suggest that deliveries to Indian operators could rebound sharply in 2026 with well over 130 new jets expected. That scale of expansion underscores why manufacturers like Embraer are moving to anchor more of their supply chains in India itself.
Embraer’s India Bet: From Sales Push to Supply Chain Hub
Embraer’s latest moves in India go well beyond a standard sales campaign. The Brazilian manufacturer has established a fully owned subsidiary in New Delhi and begun recruiting across functions such as government relations, procurement, engineering, sales and marketing. The company is openly courting major Indian carriers, including IndiGo and Air India, for potential aircraft deals across regional and possibly mid-market segments. For a country historically dominated by Airbus narrowbodies and increasingly by widebody orders for long-haul expansion, that represents a potential diversification of fleet strategies.
In parallel, Embraer has signalled that it wants India to play a central role in its global sourcing network. A high-level executive team has begun work on expanding local supplier partnerships and building an ecosystem of Indian firms that can contribute components, systems and services. This follows the company’s plans to establish a final assembly line in partnership with the Adani Group, a facility that will depend heavily on Indian suppliers for parts and spares required to roll aircraft off the line domestically.
Embraer’s timing is strategic. A broader shift is already underway as global aerospace firms respond to supply chain disruptions in Western markets. Major manufacturers and aviation suppliers, from Airbus to Rolls-Royce and major engine makers, have been increasing parts sourcing from India. Local aerospace companies have reported rapid revenue growth, and policymakers in New Delhi have been promoting ambitions to capture a meaningful share of the global aerospace supply chain by 2033. Embraer effectively plugs into this national strategy, while aligning its own need to de-risk and diversify production.
For Indian airlines, the presence of a more embedded Embraer could translate into shorter lead times for certain aircraft types, more resilient access to spare parts, and new maintenance and overhaul capabilities. For international carriers operating in India, including Emirates and Qatar Airways, a stronger local aerospace ecosystem promises better ground support and potential cost efficiencies across components and engineering work sourced from Indian vendors.
Air India’s Transformation and the Quest to Reclaim Long-Haul Traffic
Under the Tata Group, Air India has embarked on one of the most ambitious airline turnarounds in recent memory. The merger with Vistara, completed in late 2024, has consolidated the group’s full-service operations into a single brand with a significantly larger domestic and international footprint. The combined airline has since gained market share, pushing past the 26 percent threshold in domestic traffic and steadily expanding its share of international routes.
A key pillar of Air India’s strategy is fleet renewal and expansion, with large orders placed for new-generation narrowbodies and widebodies from Airbus and Boeing. Even as global delivery schedules have been constrained, Air India added roughly 20 aircraft in 2025 and is due to receive more, including new long-range aircraft that will underpin direct services to North America, Europe and Australasia. These moves are designed to claw back passengers who currently transit via Gulf or Southeast Asian hubs.
In the context of Embraer’s growing presence, Air India faces a strategic choice. Its focus to date has been on large narrowbodies and widebodies, suitable for trunk domestic routes and long-haul international operations. Embraer’s portfolio, centered on smaller regional jets, could allow Air India to strengthen connectivity between tier-two and tier-three Indian cities and its main hubs in Delhi and Mumbai, feeding long-haul flights more efficiently. While no such deal has been finalized, the manufacturer has confirmed ongoing discussions with the airline.
Air India’s success in executing its strategy will have ripple effects on the wider market. As it boosts capacity and upgrades service standards, global competitors like Emirates and Qatar Airways may find that some connecting traffic migrates to nonstop Air India services, particularly in premium cabins. That possibility is pushing Gulf carriers to invest even more deeply in India-focused products, partnerships and scheduling to protect their strong positions.
IndiGo’s Dominance, Growing Pains, and Regional Fleet Decisions
IndiGo remains the undisputed giant of India’s domestic skies. Recent data for 2025 show the airline consistently controlling more than 63 percent of the domestic market, peaking above 65 percent in certain months. In a single month such as March 2025, IndiGo flew over nine million passengers domestically, dwarfing rivals by passenger count and route network breadth. It has also emerged as one of the world’s fastest-growing airlines by seat capacity and flight frequency, reflecting its aggressive expansion strategy.
The low-cost carrier has one of the largest order books globally, with more than 900 aircraft on order, primarily Airbus narrowbodies. It inducted over 60 aircraft in 2024 and continued to add dozens more in 2025 despite global supply chain issues. Yet the very scale of its fleet has exposed vulnerabilities. A sizeable number of its aircraft have been grounded for maintenance and engine-related work, and in late 2025, IndiGo suffered a major operations and scheduling crisis linked to new crew duty time rules, leading to thousands of flight cancellations and regulatory scrutiny.
These challenges could make Embraer’s proposition more compelling. While IndiGo has historically favored a single-type fleet philosophy around Airbus narrowbodies, the quest for capacity, reliability and reach into thinner regional markets may prompt a reassessment. Embraer regional jets could offer a way to open or sustain routes where demand cannot yet support larger narrowbodies, while also giving IndiGo an additional hedge against production delays or technical issues affecting a single manufacturer.
At the same time, IndiGo’s continued dominance means that any shift in its fleet strategy would reverberate across the Indian aviation ecosystem. A substantial order for Embraer aircraft, coupled with local assembly and sourcing, could instantly create economies of scale for regional jets in India, stimulating demand for new routes and potentially encouraging other airlines, including SpiceJet and even smaller regional carriers, to consider similar equipment.
SpiceJet’s Battle for Relevance in a Consolidating Market
Once a major player in India’s low-cost segment, SpiceJet has spent recent years grappling with financial headwinds, operational disruptions and service inconsistencies. Its market share has shrunk markedly, hovering close to 2 to 3 percent of domestic passengers on recent counts. Capacity reductions have contributed to this slide, even as rivals like IndiGo and the Air India group have expanded aggressively.
Despite these setbacks, SpiceJet continues to operate key domestic routes and maintains brand recognition among price-sensitive travelers. The airline’s challenge is to stabilize its operations, restore investor confidence and modernize its fleet without the same financial firepower or group backing that supports competitors. In a marketplace where aircraft availability is at a premium, SpiceJet must secure reliable access to new or refurbished aircraft that can deliver lower operating costs and improved reliability.
Embraer’s deepening India footprint offers one possible lifeline. Regional jets or turboprops sourced via a supply chain increasingly rooted in India could help SpiceJet rebuild a network focused on underserved regional routes, where competition is lighter and yields can be more attractive. Locally sourced components and maintenance support could also reduce downtime and costs.
However, capital constraints remain a significant obstacle. Any move into a new fleet type would require careful planning, favorable financing and potentially creative partnerships. In the near term, SpiceJet’s main focus is likely to remain on optimizing its existing fleet and protecting its limited market share, even as it keeps an eye on how Embraer’s moves reshape the economics of regional flying in India.
Gulf Heavyweights Emirates and Qatar Airways Double Down on India
Emirates and Qatar Airways have long understood the centrality of India to their global networks. Flights from multiple Indian metros and large secondary cities feed their hubs in Dubai and Doha, creating a vast web of one-stop connections to Europe, Africa and the Americas. As Indian outbound tourism grows and diaspora links deepen, these Gulf carriers see significant headroom for further expansion.
In recent seasons, both airlines have added frequencies and upgauged aircraft on high-demand India routes, particularly from Delhi, Mumbai, Bengaluru and Hyderabad, while also nurturing connections from secondary cities where bilateral rights permit. Their strategies hinge on offering seamless one-stop connectivity, competitive fares and premium products that appeal to both leisure travelers and corporate clients who value the service consistency of these global brands.
The rise of a revitalized Air India, coupled with IndiGo’s expanding international ambitions, presents a more challenging environment. Air India is steadily upgrading cabins, lounges and service on long-haul routes, while IndiGo is exploring partnerships and selective international growth. Emirates and Qatar Airways thus face a dual imperative: maintain their dominance in premium connecting traffic while also ensuring that their India operations remain resilient to infrastructural bottlenecks, from congested airports to airspace constraints.
Embraer’s decision to strengthen its Indian supply chain plays indirectly into their strategies. A more mature local aerospace ecosystem can bolster reliability for all carriers operating in Indian airspace, including Gulf airlines that depend on efficient ground handling, maintenance, and the timely availability of parts for aircraft transiting the country. It also opens the door to deeper collaborations with Indian maintenance and engineering providers that may be working within Embraer’s supplier network.
A New Regional Connectivity Map for Indian Travelers
For travelers, the most visible outcome of these intertwined developments will be the evolution of route maps within India and to nearby international destinations. As domestic demand continues to rise, there is growing pressure to move beyond the traditional metro-to-metro model and open more direct services linking tier-two and tier-three cities. Regional jets are well suited to such missions, enabling airlines to test and grow new markets without committing large narrowbodies from day one.
If Embraer succeeds in securing orders from Indian airlines and establishing local assembly and sourcing, passengers in smaller cities could see more frequent and direct connections to major hubs such as Delhi, Mumbai, Bengaluru and Hyderabad. This, in turn, would improve access to long-haul flights on Air India, Emirates, Qatar Airways and others, reducing travel times and reliance on multiple stops or circuitous routings.
At the same time, increased aircraft deliveries expected from 2026 onward promise more capacity on established routes, easing some of the fare pressures that have accompanied tight supply and high demand. A more abundant fleet across the system, from large widebodies to smaller regional jets, should translate into greater schedule choice for both business and leisure travelers, particularly during peak seasons when seats have been exceptionally tight.
There are, of course, risks. Rapid growth can strain airport infrastructure, as seen in crowded terminals and slot constraints at major Indian hubs. Operational mishaps, such as IndiGo’s scheduling crisis in late 2025, highlight how quickly disruptions can ripple across the network when a dominant carrier faces constraints. Nonetheless, the overall trajectory is clear: India’s aviation market is moving into a phase where scale, connectivity and supply chain resilience will define the winners.
India’s Aviation Future: Where Airlines and Manufacturers Converge
The convergence of airline ambition and manufacturing strategy in India is creating a virtuous, if complex, cycle. Air India’s long-haul aspirations, IndiGo’s domestic dominance and international forays, SpiceJet’s struggle for renewed relevance, and the entrenched strength of Emirates and Qatar Airways all rely on one fundamental resource: access to the right aircraft at the right time, supported by a dependable network of suppliers and service providers.
Embraer’s decision to deepen its presence in India, from a New Delhi subsidiary to plans for a final assembly line and expanded local sourcing, is a direct response to that reality. It reflects confidence not only in India’s demand for aircraft, but also in its capacity to become a core pillar of the global aerospace supply chain. For policymakers in New Delhi, this aligns with broader national objectives to move up the value chain in manufacturing, engineering and technology.
Over the next several years, travelers are likely to experience the tangible benefits of these shifts in the form of more routes, newer aircraft, and potentially more competitive fares as capacity catches up with demand. For the airlines, the landscape will be unforgiving. Market leaders such as IndiGo and Air India must balance rapid growth with operational resilience, while Gulf carriers refine their India strategies in the face of more robust nonstop competition. Smaller players like SpiceJet will need to identify defensible niches, potentially powered by new regional aircraft and partnerships that emerge from Embraer’s Indian ecosystem.
What is unfolding in India’s skies is more than just a battle for market share. It is the early stage of a structural transformation in how aircraft are bought, built and operated in one of the world’s most important aviation growth markets. As Air India, Emirates, Qatar Airways, IndiGo and SpiceJet reposition themselves, and Embraer reinforces its supply chain presence, India is set to play an increasingly central role in both the travel experiences of millions and the industrial backbone of global aviation.