Indian Aviation Industry Faces Turbulence: Projected Losses Reach New Heights

The Indian aviation industry is projected to experience significant financial losses of Rs 17,000-18,000 crore in the current fiscal year, primarily due to weakened passenger traffic and operational disruptions. Factors such as flight cancellations and currency depreciation are major contributors to this financial downturn.

The Indian aviation sector is bracing for substantial financial turbulence, with projections indicating a net loss of Rs 17,000-18,000 crore in the current fiscal, according to ICRA. This forecast comes amid reduced passenger traffic and a series of operational disruptions across the industry.

ICRA revised its growth forecast for domestic air passenger traffic in FY26 to 0-3%, down from an earlier 4-6%, affected by unforeseen events like the Air India Boeing crash and numerous cancellations by IndiGo. These incidents, combined with geopolitical tensions causing flight disruptions, have dampened travel sentiment.

The depreciation of the rupee against the USD and resulting foreign exchange losses further compound the industry's challenges. Domestic air passenger traffic saw a modest 2.2% growth from April to November 2025, while international passenger traffic for Indian carriers recorded an 8.3% year-on-year increase in October.

(With inputs from agencies.)