Archive · 23 Jul 2026
Indian Airlines Face Losses Despite Traffic Growth
Indian airlines are expected to keep losing money in the next financial year, even though more people are flying within the country.
This is because the cost of fuel and leasing planes is going up, and there are problems because of conflicts in the Middle East.
The government is helping a bit, but the airlines still have a tough time ahead.
Smaller airlines might get some financial help, while bigger ones have more money to handle these problems.
Despite these issues, more people are expected to fly within India, showing that demand is strong.
Indian airlines expected to post a net loss of ₹36,000-38,000 crore in FY27.
Domestic passenger traffic growth forecasted at 3-6% in FY27.
June domestic traffic at 13.72 million passengers, up 0.9% year-on-year.
International traffic declined 31.6% year-on-year during April-May.
ATF prices 18% higher than a year earlier, with volatility due to geopolitical tensions.
- Who
- Indian airlines
- What
- Expected to remain in the red in FY27 due to higher costs and geopolitical disruptions
- When
- FY27
- Where
- India
- Why
- Elevated aviation turbine fuel (ATF) prices, higher aircraft lease rentals, and disruptions from the West Asia conflict
Cost Pressures
Resilient Demand
Fuel Costs
Cost Pressures
Higher aviation turbine fuel (ATF) prices due to geopolitical tensions are significantly increasing operational costs.
Resilient Demand
Domestic passenger traffic is expected to grow by 3-6%, indicating resilient demand despite cost pressures.
Lease Rentals
Cost Pressures
Increased aircraft lease rentals are adding to the financial burden of airlines.
Resilient Demand
Airlines are inducting new aircraft to meet growing demand, which is a positive sign for the industry.
Government Intervention
Cost Pressures
Calibrated government intervention has partly softened the impact of rising ATF prices but is not enough to offset all cost pressures.
Resilient Demand
The government's support measures are helping smaller airlines receive liquidity support through schemes like ECLGS 5.0.
- Expected Net Loss
- ₹36,000-38,000 crore in FY27
- Domestic Passenger Traffic Growth
- 3-6% in FY27
- June Domestic Traffic
- 13.72 million passengers
- April-June Domestic Traffic
- 42.93 million passengers
- International Traffic Decline
- 31.6% year-on-year during April-May
- ATF Price Increase
- 18% higher than a year earlier
- Passenger Load Factor
- 90.2% in June