Flying High Amidst Challenges: The Indian Aviation Industry Outlook

Domestic air traffic in India is projected to grow by 7-10% in the current fiscal year, reaching 164-170 million passengers. Despite this growth, the industry's losses are expected to total Rs 2,000-3,000 crore. Factors include higher fuel costs and foreign exchange impacts, although improved pricing power offers some respite.

The Indian aviation industry anticipates a surge in domestic air traffic, with projections suggesting a 7-10% increase to 164-170 million passengers in the current fiscal year, as reported by rating agency Icra.

During the first half of 2024-25, domestic air passenger traffic rose to 79.3 million, a 5.3% increase, albeit affected by extreme weather conditions. Meanwhile, international passenger traffic for Indian carriers saw a notable rise of 16.2%.

Despite these growth trends, the sector is expected to incur a net loss of Rs 20-30 billion in both FY2025 and FY2026. Higher fuel prices and foreign currency expenses continue to challenge the industry, though improved pricing strategies have mitigated some losses.

(With inputs from agencies.)