Indian Airlines: Navigating Turbulence Towards Recovery

Indian airlines are expected to reduce losses significantly in the upcoming fiscal years despite prevailing challenges. A growing domestic air passenger market, supported by government initiatives and improving operating conditions, is set to improve the financial health of the aviation industry.

Indian airlines are anticipated to cut down their losses to Rs 11,000-12,000 crore next fiscal, down from Rs 17,000-18,000 crore this year, as highlighted by ratings agency ICRA. Despite ongoing challenges, a stable outlook persists for the domestic aviation industry.

ICRA forecasts domestic air passenger traffic to rise by 6-8%, reaching 175-179 million by FY2026-27, while the international passenger count benefits from government initiatives and a low base effect, potentially growing by 7-9% this year and 8-10% next year.

Key factors such as improved debt metrics, rising yields, and increased capacity are expected to drive recovery. However, challenges like fuel costs and currency fluctuations remain, as airlines continue to strategize for a more stable operational environment.

(With inputs from agencies.)