Indian aviation sector is expected to post to a net loss of Rs 20-30 billion in FY2025-26 (FY26), according to the credit rating agency agency agency. The expected loss is in the line of estimated losses for FY2024-25 (FY25), showing the ongoing challenges of fuel costs, and rent-related costs.
In its report, ICRA highlighted that despite the strong demand for air travel, planes are struggling to raise ticket prices due to severe competition and high market conditions. It is, combined with high aviation turbine prices of aviation (ATF) is expected to weigh in airline crops and profits.
Pressure increases, interest expenses are expected to increase in FY26 as airlines that continue to expand their arches by rented aircraft. The resulting increase in lease debts is likely to push financing costs, further compression of profit margins.
However, the expected losses for FY26 are more than pandemic-era setbacks. The sector reported net losses of Rs 235 billion in FY2021-22 and Rs 174 billion in FY202222-23, due to covid-19 repair.
The ICRA mentions a gradual development of financial strength. The industry’s interest ratio is expected to lead between 1.5 and 2.0 times in FY26, which indicates moderate strength to debt service.
Passengers’ traffic numbers reflect the essential strength of demand. For June 2025, the traffic areas of air plane is approximately 138.7 lakh, mark one year increase in June 2024.
In Q1 FY26 (April-June 2025), domestic traffic stood at 422.4 lakh, up 5.1% year-on-year. International traffic for May 2025 has reached 29.7 Lakh, up 7.3%, despite 7.9% from April due to geopolitical concerns. For April-May (2M FY26), international traffic rises 12.1% 59.8 lakh.
For the whole year of financial FY25, financial home traffic is about 1,653.8 lakh, registering a 7.6% growth. International passenger traffic for Indian carriers stood at 338.6 Lakh, up 14.1% from last year
