PTI New Delhi

Indian aviation industry's net financial losses to increase to Rs 95-105 billion in FY2026, credit rating agency ICRA said in a release. The agency expects net losses to widen more than Rs 100 billion in FY2026, compared with Rs 55 billion in FY2025. The increase is attributed to slower traffic growth amid high aircraft deliveries and rising operational costs. 

According to the release, a major cost driver continues to be aviation turbine fuel (ATF), which rose 3.3 per cent sequentially in October 2025. Fuel prices averaged Rs 95,181 per kilolitre in FY2025, lower than last year, but volatility persists due to exchange rate fluctuations. Fuel accounts for 30-40 per cent of airlines' operating costs, while a large share of expenses remains dollar-denominated, leaving airlines vulnerable to currency movements. 

India's domestic air passenger traffic also declined in September 2025, as compared to the same period the previous year. The domestic air passenger traffic was estimated at 128.5 lakh in September 2025, down 1.4 per cent from 130.3 lakh in September 2024 and 0.8 per cent lower than 129.5 lakh in August 2025. 

The fall comes despite airlines deploying slightly higher capacity compared to the previous month, though capacity remained 3.3 per cent lower year-on-year. The aviation sector continues to navigate a mix of operational and financial headwinds. 

During the first half of FY2026 (April-September 2025), domestic passenger traffic touched 803.7 lakh, a 1.3 per cent increase over the same period last year. ICRA said this slow growth reflected "cautious travel sentiment" amid ongoing challenges in the industry.