Archive · 28 Oct 2025
Indian Aviation Losses to Surge Amid Slower Traffic Growth
Imagine airlines in India are like buses trying to carry people.
Right now, fewer people are flying inside India, meaning the buses aren't as full as they used to be.
At the same time, the cost of fuel for these planes is going up, and they have to pay for new planes too.
All these things together mean the airlines are going to lose more money next year than they did this year.
They are expected to lose about 100 billion rupees, which is a lot of money.
While fewer people are flying within India, more people are flying to and from India on international flights, showing strong growth.
The people who study these things think the airlines will continue to operate, but they will face challenges due to rising costs and slower domestic travel.
They have lowered their expectations for how many people will fly domestically next year because of these problems.
Indian aviation industry's net financial losses are projected to reach Rs 95-105 billion in FY2026, a significant increase from FY2025.
The rise in losses is attributed to slower domestic traffic growth, high aircraft deliveries, and escalating operational costs, particularly aviation turbine fuel (ATF).
Domestic air passenger traffic saw a decline in September 2025 compared to the previous year and the previous month.
Despite a domestic slowdown, international air traffic for Indian carriers has shown robust growth.
ICRA has revised down its FY2026 domestic air passenger traffic growth forecast to 4-6% due to various demand-weighing factors.
- Who
- Indian aviation industry, according to ICRA
- What
- Projected surge in net financial losses to Rs 95-105 billion in FY2026, driven by slower traffic growth, high aircraft deliveries, and rising operational costs.
- When
- Financial Year 2026 (FY2026)
- Where
- India
- Why
- Slower domestic traffic growth, high aircraft deliveries, rising operational costs including aviation turbine fuel (ATF), dollar-denominated expenses, exchange rate fluctuations, cautious travel sentiment, cross-border escalations leading to flight disruptions, travel hesitancy following an aircraft accident, and trade tensions.
Domestic Air Traffic Decline
International Air Traffic Growth
Passenger Numbers
Domestic Air Traffic Decline
Domestic air passenger traffic declined by 1.4% in September 2025 compared to the previous year, and was also 0.8% lower than in August 2025. In the first half of FY2026, domestic passenger traffic increased by only 1.3% year-on-year.
International Air Traffic Growth
International air traffic for Indian carriers rose by 7.8% year-on-year in August 2025. From April to August 2025, Indian carriers saw a 9.7% increase in international passengers.
Capacity Deployment
Domestic Air Traffic Decline
Despite a slight increase in capacity deployment from the previous month, domestic capacity remained 3.3% lower year-on-year in September 2025.
International Air Traffic Growth
The article does not provide specific details on international capacity deployment in relation to growth, focusing instead on passenger numbers.
- Projected Net Loss FY2026
- Rs 95-105 billion
- Estimated Net Loss FY2025
- Rs 55 billion
- Key Cost Driver
- Aviation Turbine Fuel (ATF)
- ATF Price (Oct 2025)
- Up 3.3% sequentially
- Fuel Cost Share
- 30-40% of operating costs
- Domestic Passenger Traffic Growth Forecast FY2026
- 4-6% (revised from 7-10%)