ICRA Cuts FY26 Aviation Forecasts, Keeps India Sector Outlook Stable
ICRA expects weakness to persist through FY2026 with recovery only after conditions normalize in FY2027.
Overview
- ICRA trimmed domestic traffic growth to 0–3% for FY2026, projecting 165–170 million passengers versus an earlier 4–6% view.
- The agency lowered its international growth forecast for Indian carriers to 7–9% from 13–15% previously.
- Industry net losses are now pegged at Rs 170–180 billion for FY2026, with IndiGo’s early‑December cancellations and related costs a major contributor.
- December 2025 saw a contraction in domestic traffic and roughly 7% fewer departures year on year, even as load factors hovered near 94% due to constrained capacity.
- ATF prices fell 7.2% sequentially in January 2026 but remain higher year on year, while rupee depreciation is adding forex losses; ICRA still projects 6–8% domestic growth in FY2027.