Indian Aviation Sector Braces for Financial Turbulence by 2026

The Indian aviation industry is on the cusp of significant challenges, with net losses expected to soar to Rs 95,000-1,05,000 crore by FY2026, up from Rs 55,000 crore in FY2025, ICRA has reported.

Passenger traffic growth has decelerated amid increased aircraft deliveries, with projections for FY2026 now trimmed to 4-6% from an earlier 7-10%. In FY2025, the industry capitalized on strong demand and higher yields, but sentiment has dampened as constraints like flight disruptions and trade tensions persist.

Key cost drivers, such as fuel prices and currency devaluation, have exacerbated financial pressures. Despite a 5% capacity boost in FY2025, advancing fleet sizes, and more efficient aircraft orders, grounded fleets due to technical issues continue to afflict operational capabilities.

(With inputs from agencies.)