Domestic Aviation Industry Estimated To Post Rs 17,000-18,000 Crore Loss In FY26
ICRA has revised its forecast for domestic air passenger traffic growth to 0-3% in fiscal 2026 against its earlier projection of 4-6%, the ratings agency said.
The domestic aviation industry is estimated to post around Rs 17,000-18,000 crore net loss in the current fiscal year on account of a likely lower passenger traffic, among other factors, ratings agency ICRA said on Monday.
Earlier, the industry was projected to post a loss of Rs 9,500-10,500 crore during 2025-26.
ICRA has also revised downward its forecast for domestic air passenger traffic growth to 0-3% in fiscal 2026 on account of multiple factors, including Air India Boeing 787-8 plane crash in June this year and thousands of flights cancellations by IndiGo earlier this month, among others.
ICRA has revised its forecast for domestic air passenger traffic growth to 0-3% in fiscal 2026 against its earlier projection of 4-6%, the ratings agency said.
This revision reflects a slower-than-expected traffic growth in April-November period of fiscal 2026, which was impacted by cross-border escalations that led to flight disruptions and cancellations during the year, along with the (Air India) aircraft accident tragedy in June that made travellers hesitant at least during the period immediately post the accident, ICRA said.
It also reflects the impact on business travel owing to headwinds stemming from US tariffs, the ratings agency said, adding that downward revision is also due to the impact of operational disruptions at IndiGo from Dec. 3-8, which resulted in cancellation of around 4,500 flights.
While the IndiGo flight cancellations accounted for only about 0.4% of the total annual industry departures, ICRA said it expects the travel sentiments to dampen in the aftermath of the IndiGo episode.
ICRA said it has also revised its international air passenger traffic growth forecast for Indian carriers for this fiscal year to 7-9% from its earlier projection of 13-15%.
"Coupled with the above (an estimated lower domestic and international passenger traffic), the depreciation of the rupee against the dollars resulting in foreign exchange losses, has caused ICRA to revise its net loss forecast for the Indian aviation industry to Rs 17,000-18,000 crore in fiscal 2026, higher than its earlier projections of Rs 9,500-10,500-crore," it said.
The domestic air passenger traffic for November 2025 was estimated at 1.54-crore, 8.4% higher than 1.42-crore in November 2024 and 10.1% higher than 1.40 crore in October 2025, it said.
For April-November 2025, domestic air passenger traffic was about 10.96 crore, reflecting a 2.2% year-on-year growth, as per the ratings agency.
Also, in October this year, international passenger traffic for Indian carriers stood at 29.9 lakh, a year-on-year growth of 8.3% and a sequential growth of 6%, ICRA said.
