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Domestic aviation industry's net losses likely to widen to Rs 9,500-10,500 crore in FY26: Icra
Nov-19-2025

Rating agency Icra in its latest report has said that domestic aviation industry's net losses are projected to nearly double to Rs 9,500 crore to Rs 10,500 crore in the current fiscal (FY26) as compared to an estimated loss of Rs 5500 crore in FY25, mainly impacted by moderating passenger growth and higher costs due to aircraft deliveries. The agency also said the expected losses are significantly lower than Rs 21,600 crore and Rs 17,900 crore reported in FY22 and FY23, respectively. 

While maintaining a stable outlook and projecting 4-6 per cent domestic passenger traffic growth in FY26, it said the airline industry's financial performance is expected to remain under pressure. It said growth prospects for the current fiscal year are expected to remain moderate due to cross-border tensions, global disruptions, travel hesitancy post the June 2025 aircraft tragedy and recent disruptions related to air traffic control operations. Further, it forecasts the industry's interest coverage ratio to range between 1.5 and 1.7 times for FY26. In the last financial year, the passenger traffic growth was 7.6 per cent, translating to total passenger volumes of 16.53 crore. 

In October, domestic air passenger traffic is estimated to have reached 1.43 crore, a year-on-year growth of 4.5 per cent and a sequential increase of 12.9 per cent from September. It said ‘This momentum in travel demand was supported by an expansion in capacity, with domestic departures reaching approximately 99,816 during October, representing a sequential increase of 10.8 per cent and a 1.7 per cent rise year-on-year.’


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