Thailand, one of the most popular overseas holiday destinations for Indian travellers, has lost its position as the country’s second-largest international aviation market after a visa policy flip-flop unsettled tourists and triggered a sharp pullback in airline capacity, pushing it to the fifth spot behind Saudi Arabia, Singapore and the United Kingdom.
Scheduled seat capacity between India and Thailand declined 29% year-on-year to 218,428 seats in July from 305,999 a year earlier. Compared with April, when airlines had scheduled 334,993 seats, capacity has contracted by nearly 35%, reflecting a sharp deterioration in demand over just three months, according to an analysis of OAG data.
The decline followed a policy U-turn that rattled the travel market during the peak summer booking season.
In May, Thailand’s Cabinet approved a proposal to withdraw the 60-day visa-free entry available to Indian travellers and move them back to the Visa-on-Arrival (VoA) regime, citing concerns over overstays and illegal employment. Although the proposal never came into force, the announcement created widespread confusion among travellers and tour operators, prompting many holidaymakers to defer bookings or switch to alternative destinations.
The impact was almost immediate. Capacity declined from 334,993 seats in April to 302,614 in May, before falling further to 262,186 in June and 218,428 in July as airlines progressively reduced services in response to weaker bookings.
Recognising the potential damage to its tourism industry, Thailand reversed the proposal on July 14, restoring visa-free entry for Indian visitors. However, the government reduced the maximum permitted stay from 60 days to 30 days, saying the revised duration better reflected the average length of stay of Indian tourists.
By then, however, much of the summer travel season had passed, airlines had finalised their schedules, and aircraft had already been redeployed to markets offering stronger demand. Thailand’s decline paved the way for Saudi Arabia to become India’s second-largest international aviation market in July. Scheduled seat capacity between India and Saudi Arabia rose 5% year-on-year to 307,751 seats from 293,384 a year earlier.
The Kingdom’s rise was driven by a surge in Umrah travel, despite the broader decline in capacity on West Asia routes following the US-Iran conflict. On a month-on-month basis, seat capacity jumped nearly 36% from 226,574 seats in June as airlines added flights for the start of the new Umrah season. Saudi authorities also reported a 22.5% increase in Umrah arrivals at the beginning of the 1448 AH season, with international pilgrims starting to arrive from June 1.
The United Arab Emirates remained the country’s largest international aviation market despite a 5.7% year-on-year decline in seat capacity to 1.10 million from 1.17 million.
Singapore retained its position as India’s third-largest international destination despite a moderation in capacity, underscoring the resilience of business and leisure travel between the two countries. Scheduled seat capacity stood at 229,659 in July, down 11.4% from 259,348 a year earlier and 7.8% lower than June’s 249,100 seats.
The United Kingdom improved its ranking from fifth to fourth as Indian airlines redeployed widebody aircraft from disrupted West Asia routes to Europe, particularly London and other high-demand destinations. Scheduled seat capacity to the UK rose 27% year-on-year to 218,697 seats in July from 172,205 a year earlier, helping it move ahead of Thailand in the rankings.
Airlines also redeployed capacity beyond the traditional international markets. Italy and the Netherlands recorded a sharp increase in capacity during the period as carriers expanded their European networks, while in Asia, Indonesia and Japan emerged as alternative leisure destinations, reflecting airlines’ efforts to recalibrate international capacity in line with changing travel demand.