Overview
- The industry is estimated to post a Rs 170–180 billion net loss in 2025-26 after modest traffic growth tied to cross-border tensions, weather disruptions, a June 2025 aircraft accident, elevated US tariffs affecting business travel, and IndiGo’s December 2025 operational failure.
- Domestic passenger traffic is forecast to grow 6–8% to 175–179 million in 2026-27, with international traffic for Indian carriers projected to expand 8–10% the same year.
- Interest cover is expected to improve to 1.3–1.5 times in 2026-27 from 0.7–0.9 times in 2025-26 despite rising debt linked to new aircraft deliveries.
- Grounded aircraft have declined to an estimated 13–15% of the fleet in February 2026 (about 117 aircraft) from 20–22% in September 2023, with 865 aircraft in service at December 31, 2025 and more than 1,700 pending deliveries over the next decade.
- Profitability remains sensitive to input costs and currency, with average ATF at Rs 91,173 per kilolitre in the first 11 months of 2025-26 (down 4% year on year) and the rupee about 3.2% weaker against the dollar in the first nine months.