Nevertheless, the financial outlook for the sector remains bleak. ICRA estimates a net loss of ₹20,000–₹30,000 crore for FY2026. “The Indian aviation industry is set to report a net loss of ₹20–30 billion in FY2026,” the agency noted in its report. These figures align with projected losses for FY2025 and significantly contrast with the ₹1,600 crore net profit reported in FY24.
Multiple factors contribute to the ongoing losses, including high jet fuel prices, rising lease liabilities due to fleet expansion, and increased operating costs. While passenger demand is robust, these financial challenges are expected to heavily impact airline profitability.
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Although international traffic is projected to grow substantially, Indian carriers are expected to see a 15–20% increase in international passenger numbers during FY26. In FY25, they transported 33.86 million international passengers, showing a 14.1% rise from the prior year and an impressive 49% increase over FY20 figures.
Recent monthly trends indicate a broader growth trajectory. Domestic passenger traffic in May 2025 reached an estimated 14.36 million, reflecting a 4.1% increase compared to May 2024. However, this figure remained relatively stable from April 2025, suggesting a possible plateau in monthly growth. Airlines offered 5.1% more capacity in May 2025 compared to the same month the previous year.
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Despite strong passenger demand, ICRA warned that the pace of financial recovery will be gradual. The aviation sector continues to contend with high fixed costs, costly aviation turbine fuel (ATF), and significant interest payments related to aircraft leasing.
As airlines work to maintain high passenger load factors (PLFs) in a competitive market, there will be ongoing pressure on ticket pricing, which may further strain profitability.
(Edited by : Jerome Anthony)
