Will India's Domestic Air Traffic Surge by 10% in FY26?
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Synopsis
Discover the forecast for India's domestic air passenger traffic, which is expected to surge by 7-10% in FY26. This positive outlook comes amid stable conditions in the civil aviation sector, despite some geopolitical challenges. What does this mean for travelers and the industry?
Key Takeaways
- Projected domestic traffic growth of 7-10% in FY26.
- International traffic expected to rise by 15-20%.
- Stable outlook for the civil aviation sector.
- Capacity deployment increased by 4.9% in June 2025.
- Operational challenges due to geopolitical tensions.
New Delhi, July 11 (NationPress) India's domestic air passenger traffic is projected to expand by a strong 7-10 percent in FY26, as indicated by a recent report from ICRA released on Friday. This report highlights a stable outlook for the nation's civil aviation sector.
For international travel, Indian carriers are anticipated to experience a growth of 15-20 percent in FY2026. However, this remains subject to monitoring due to current geopolitical issues, according to the report.
In June 2025, domestic air passenger traffic was estimated at 138.7 lakh, which is a 5.1 percent increase from 132.1 lakh in June 2024. Nonetheless, there was a slight sequential decline of 1.3 percent.
Airlines increased capacity in June 2025 by 4.9 percent compared to June 2024.
During the first quarter of FY2026 (April-June 2025), domestic air passenger traffic reached 422.4 lakh, marking a year-on-year growth of 5.1 percent.
In May 2025, international passenger traffic for Indian airlines was reported at 29.7 lakh, showing a year-on-year increase of 7.3 percent.
For the initial two months of FY2026, international traffic for Indian carriers totaled 59.8 lakh, reflecting a year-on-year growth of 12.1 percent, as per the ICRA report.
The operational costs for India's aviation industry have likely risen recently due to flight cancellations and various operational challenges stemming from tensions with Pakistan. Despite this, overall passenger traffic and pricing have remained stable, the report noted.
ICRA maintains a stable outlook for the Indian aviation industry. However, various geopolitical and operational challenges, such as rising crude oil prices (due to the Israel-Iran conflict), restricted airspace over Iran and Pakistan for Indian carriers, potential increases in insurance premiums following a recent aircraft crash, and possible travel hesitancy require vigilant monitoring for potential risks, the report emphasized.
Furthermore, the aviation sector experienced consistent pricing power in FY2025, with stable yields. Growth in domestic air passenger traffic slowed to 7.6 percent in FY2025, aligning with ICRA's forecasts, considering a high base from FY2024 and reduced traffic in the first half of FY2025 due to extreme heatwaves and other weather-related interruptions, the report stated.
Point of View
I believe the projected growth in India's aviation sector reflects resilience amidst challenges. While geopolitical factors introduce uncertainties, the overall stability in domestic traffic and capacity deployment suggests a robust recovery for the industry. We must remain vigilant to ensure the safety and comfort of passengers.
NationPress
02/09/2025
Frequently Asked Questions
What is the projected growth rate for India's domestic air traffic in FY26?
The projected growth rate for India's domestic air passenger traffic in FY26 is between 7-10%.
How much is international passenger traffic expected to grow?
International passenger traffic for Indian carriers is expected to grow by 15-20% in FY2026.
What factors could impact the aviation sector in India?
Factors such as geopolitical tensions, rising crude oil prices, and operational challenges could impact the aviation sector.
What was the domestic air passenger traffic in June 2025?
Domestic air passenger traffic in June 2025 was estimated at 138.7 lakh.
How did operational costs affect the aviation industry recently?
Operational costs for the Indian aviation industry increased due to flight cancellations and challenges following tensions with Pakistan.
