English
English
English
India’s domestic aviation sector is staring at deeper financial stress in FY26, with losses now estimated at Rs 17,000 to 18,000 crore as passenger traffic slows, disruptions persist, and costs rise, forcing airlines to brace for a challenging year ahead.
Domestic passenger growth cut to 0 to 3%.
New Delhi: India’s domestic aviation industry is expected to record a significant net loss of around Rs 17,000 to 18,000 crore in the current financial year. This marks a sharp deterioration from earlier estimates, which had projected losses in the range of Rs 9,500 to 10,500 crore. The revised outlook reflects weaker passenger demand, operational disruptions, and rising financial pressures that continue to weigh heavily on airline profitability.
One of the key factors behind the increased loss projection is the slowdown in domestic air passenger traffic. Growth for fiscal 2026 is now expected to remain between zero and three percent, significantly lower than the earlier forecast of four to six percent. This revision points to softer demand and growing uncertainty in travel patterns across the country.
Passenger confidence took a hit following a fatal aircraft accident involving an Air India Boeing 787 aircraft in June. In the immediate aftermath, travelers showed hesitation, impacting bookings and load factors. In addition, cross border escalations during the year led to flight disruptions and cancellations, further affecting traffic momentum during the April to November period.
Operational challenges at IndiGo added to the sector’s woes when thousands of flights were cancelled between December 3 and 8. While these cancellations accounted for only about 0.4 percent of total annual departures, the episode is expected to have dampened travel sentiment. Such large scale disruptions tend to amplify passenger anxiety and can have a ripple effect on demand across the industry.
The slowdown has also been felt in the business travel segment. Global economic headwinds, including the impact of United States tariffs, have affected corporate travel demand. Reduced business travel has limited airlines’ ability to rely on higher yielding passengers, putting additional pressure on revenues at a time when costs remain elevated.
IndiGo issues travel advisory amid fog disruption; Flights delayed across multiple airports
The outlook for international passenger traffic has also been revised downward. Growth for Indian carriers on international routes is now estimated at seven to nine percent, compared to the earlier expectation of thirteen to fifteen percent. This weaker performance, combined with domestic challenges, has further constrained the overall revenue outlook for airlines.
Another major contributor to rising losses is the depreciation of the rupee against the dollar. Since several airline expenses such as aircraft leases, maintenance, and fuel are dollar denominated, the weaker rupee has led to foreign exchange losses. This has compounded the impact of lower passenger volumes, pushing overall losses higher.
Civil Aviation Minister: Year-Round Airfare Cap Not Feasible, Market-Driven Pricing Essential
Despite the broader slowdown, monthly traffic figures show some resilience. Domestic air passenger traffic in November 2025 stood at around 1.54 crore, higher than both November 2024 and October 2025. For the April to November 2025 period, domestic traffic reached approximately 10.96 crore, reflecting modest year on year growth of just over two percent. International passenger traffic for Indian carriers in October 2025 was nearly 29.9 lakh, showing steady but moderated growth.
