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Indian aviation industry may post higher losses at Rs 9,500-10,500 crore in FY26: ICRA
Aug-29-2025

Ratings agency ICRA in its latest report has said that the Indian aviation industry may post higher losses at Rs 9,500-10,500 crore this fiscal (FY26) from an estimated Rs 5,500 crore in FY25, owing largely to the ongoing geopolitical situation and trade headwinds. 

The ratings agency said the estimated losses for the current fiscal, however, remain significantly lower than those reported in FY22 and FY23 at Rs 21,600 crore and Rs 17,900 crore, respectively. It forecasts a modest increase in domestic air passenger traffic to 172-176 million in FY26, reflecting a growth of 4-6 per cent over the previous year, lower than its earlier projections of a 7-10 per cent increase. 

According to the report, passenger traffic growth in the first quarter of FY26 was 4.4 per cent year-on-year, weighed down by cross-border escalations that had led to flight disruptions and cancellations, as well as travel hesitancy post the aircraft accident tragedy. Accordingly, it said the yields declined by 4-5 per cent year-on-year in Q1 FY26, and added that a prolonged period of monsoons is likely to have affected air travel in July-August 2025, and now trade headwinds emanating from US tariffs are set to dampen business sentiments in the coming quarters, bringing more circumspection to travel. 


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