Indian aviation set to develop by 10% by FY2026, however monetary losses more likely to persist: ICRA report, ETCFO
India’s aviation sector is projected to proceed rising in FY2026, with home air passenger site visitors anticipated to rise by 7–10% year-on-year, reaching between 175 and 181 million passengers, in accordance with a report by ICRA.
This projection follows a 7.6% improve in FY2025, when home site visitors touched 165.4 million, marking a robust restoration at 16.8% above pre-pandemic ranges recorded in FY2020.
Nevertheless, regardless of the regular progress in passenger numbers, the business is more likely to stay within the pink. ICRA estimates a web lack of Rs 20,000–30,000 crore in FY2026, consistent with the losses anticipated for FY2025. It is a sharp distinction to the Rs 1,600 crore web revenue posted in FY2024, stated ANI citing the report.
In accordance with the report, continued monetary pressure is being pushed by elevated working prices, together with excessive aviation turbine gasoline (ATF) costs and growing lease obligations tied to new plane acquisitions. Whereas the curiosity protection ratio—a measure of an organization’s potential to fulfill curiosity funds—is forecast to enhance to between 1.5 and a pair of.0 instances, it nonetheless displays a cautious outlook.
On the worldwide entrance, Indian airways are additionally projected to see sturdy progress. Worldwide passenger site visitors is predicted to extend by 15–20% in FY2026. In FY2025, Indian carriers flew 33.86 million worldwide passengers, a 14.1% rise over the earlier yr and practically 49% greater than the FY2020 determine.
Current month-to-month knowledge helps this progress pattern. Home air journey in Might 2025 was estimated at 14.36 million passengers, representing a 4.1% improve over Might 2024. Nevertheless, site visitors remained largely secure in comparison with April 2025. Airways additionally expanded capability by 5.1% year-on-year through the month.
Regardless of constructive developments in site visitors and capability, ICRA cautioned that profitability will stay underneath stress. Persistent excessive mounted prices, elevated gasoline costs, and elevated curiosity bills from plane leasing are anticipated to weigh closely on monetary efficiency.
Moreover, carriers could face stress on yields as they work to maintain excessive passenger load elements amid rising working prices.
