Overview
- ICRA retained a stable sector outlook and now pegs domestic passenger growth at 4–6% in FY26 after April–October traffic rose 1.6% to 944.5 lakh.
- International traffic for Indian carriers is projected to expand 13–15% this fiscal.
- Industry-wide net losses are forecast at Rs 95–105 billion in FY26 versus an estimated Rs 55 billion in FY25, driven by moderating demand and higher costs from aircraft deliveries.
- Operational constraints persist, with about 133 aircraft—15–17% of the fleet—grounded as of March 31, 2025, alongside recent ATC disruptions and post-crash travel hesitancy.
- Yields face pressure from ATF prices and rupee–dollar moves; ICRA sees interest coverage at 1.5–1.7x, while the DGCA has proposed 48‑hour penalty‑free ticket changes and refunds within 21 working days.