FY26 sees 1.4% growth in India’s domestic air passenger traffic: Icra

The ratings agency -- Icra has said that India’s domestic air passenger traffic increased 1.4% year-on-year to 1,677.4 lakh in FY26, consistent with its forecast of 0-3%. For FY25, the combined passenger count for all Indian carriers was 1,653.8 lakh. It said for March this year, the domestic air passenger traffic rose 1% year-on-year to 146.8 lakh. Moreover, it said that airlines operated with 3% less capacity in March 2026 compared to the same month the previous year.

The agency noted that it is estimated that the domestic aviation industry operated at a passenger load factor of 89.5% in the reporting month compared to 86% in March 2025. Further, it stated that international passenger traffic for Indian carriers in February this year stood at 28.5 lakh, a decline of 0.3% year-on-year and a sequential fall of 16%. For the April-February period of the previous fiscal, it was seen at 331.5 lakh, a growth of 7.7%.

Besides, it noted that average aviation turbine fuel (ATF) prices, announced on April 1, 2026, rose 9.2% sequentially and 18.2% year-on-year on account of the West Asian conflict. While crude oil prices rose 45.5% month-on-month in March this year due to the geopolitical crisis, the pass-through to ATF prices was moderated. Although the civil aviation ministry capped domestic ATF price increases at 25% sequentially, the oil marketing companies raised ATF prices by only 9.2% sequentially in April 2026 for domestic operations, moderating the immediate cost impact on the aviation sector.