New Delhi, Dec 29 Factors like India-Pakistan conflict in May, deadly Air India crash in June, flight cancellations earlier this month due to severe IndiGo crisis and the rupee depreciation against US dollar can result in Rs 170-Rs 180 billion loss to the Indian aviation industry this fiscal (FY26), higher than the earlier projections of Rs 95-Rs 105 billion, a report showed on Monday.
ICRA has revised its forecast for domestic air passenger traffic growth to 0-3 per cent in FY26 against its earlier projection of 4-6 per cent.
This revision reflects a slower-than-expected traffic growth in 8 months of FY26, which was impacted by cross-border escalations (that led to flight disruptions and cancellations earlier during the year); the aircraft accident tragedy in June 2025 that made travellers hesitant at least during the period immediately post the accident; and the impact on business travel owing to the headwinds stemming from US tariffs; and the impact of operational disruptions at IndiGo from December 3, 2025 to December 8, 2025, leading to around 4,500 flight cancellations.
“While the IndiGo flight cancellations accounted for only about 0.4 per cent of the total annual industry departures, ICRA expects the travel sentiments to dampen in the aftermath of the IndiGo episode. ICRA has also revised its international air passenger traffic growth forecast for Indian carriers for FY2026 to 7-9 per cent from its earlier projection of 13-15 per cent,” the rating agency mentioned.
The domestic air passenger traffic for November 2025 was estimated at 154.5 lakh, 8.4 per cent higher than 142.5 lakh in November 2024 and 10.1 per cent higher than 140.3 lakh in October 2025.
“For 8M FY2026 (April-November 2025), domestic air passenger traffic was 1,096.5 lakh, reflecting a YoY growth of 2.2 per cent,” said the report.
In October 2025, international passenger traffic for Indian carriers stood at 29.9 lakh, a YoY growth of 8.3 per cent and a sequential growth of 6.0 per cent.
“For 7M FY2026 (April-October 2025), international passenger traffic for Indian carriers stood at 205.5 lakh, a YoY growth of 9.0 per cent,” the report noted.
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