Losses for India's airline industry are expected to widen to $400 million to $600 million in fiscal 2025 as higher costs outweigh a rise in passenger demand, a top aviation consultancy said on Wednesday.

CAPA India estimated losses for fiscal 2024 at $300 million to $400 million and said it sees yields - the average amount paid by a passenger to fly one for kilometre – for the current year rising around 1%.

Overall airline costs are expected to rise 3.8% in the fiscal year 2025, the consultancy added.

Despite infrastructure limitations, India is currently the world's fastest-growing aviation market with demand surpassing the supply of jets.

India's skies are dominated by low-cost carrier IndiGo , which holds a 60% market share. The Air India group, which houses two budget carriers and two full-service carriers in Air India and Vistara, have a roughly 30% share.

Newer low-cost carrier Akasa Air, and SpiceJet are the other major airlines.

CAPA India estimated domestic passenger traffic to grow to 161 million to 164 million from about 154 million. The consultancy sees international traffic growing to 75 million to 78 million. (Reporting by Shivansh Tiwary and Chris Thomas in New Delhi, Writing by Nandan Mandayam in Bengaluru)