New Delhi, India: India’s aviation industry is bracing for a difficult FY2026, with ICRA estimating sector-wide losses to climb to Rs 95–105 billion, almost double the Rs 55 billion loss expected in FY2025. Softening passenger growth, upcoming fleet inductions and ongoing global and domestic disruptions are set to pressure financial performance. Even so, ICRA has maintained a stable outlook for the year, supported by steady travel demand, though influenced by cross-border tensions, accident-related caution and tariff-linked challenges on the commercial side.
Domestic passenger traffic in October 2025 reached 142.8 lakh, up 4.5% from October 2024 and 12.9% higher than September 2025. Capacity deployment grew 1.7% year-on-year to 99,816 departures, with passenger load factor rising to 84.7%, compared with 82.4% a year earlier.
For April–October 2025, domestic traffic stood at 944.5 lakh, a 1.6% year-on-year increase. ICRA expects full-year FY2026 domestic travel to grow 4–6%, reaching 172–176 million passengers.
International traffic carried by Indian airlines rose 5.8% year-on-year in September 2025, touching 28.3 lakh, though sequentially down by 5.7%. In H1 FY2026, international traffic reached 175.6 lakh, marking 9.1% growth. ICRA projects further expansion of 13–15% in FY2026.
Aviation turbine fuel (ATF) remains a key cost concern. ATF prices in November 2025 were 4.4% higher year-on-year and 0.8% higher month-on-month. FY2025 had seen average ATF prices fall to Rs 95,181 per KL, about 8% lower year-on-year, but recent months have reversed that relief.
Fuel constitutes 30–40% of airline operating expenses, while 35–50% of major costs are dollar-linked. The rupee’s depreciation in Q2 FY2026 led to notable forex losses for several carriers, though most remain unrealised.
Fleet shortages persist. Pratt & Whitney engine problems and broader supply-chain delays resulted in around 133 aircraft being grounded across various airlines by March 2025, representing 15–17% of total industry capacity.
IndiGo had 70 aircraft grounded in March 2024 due to powder-metal contamination, which reduced to about 40 by September 2025. Go Airlines, hit by similar issues, eventually grounded half its fleet in FY2024 and suspended operations. These constraints have increased operating costs through replacement leases, poorer fuel efficiency and higher spot-rental rates.
Despite strong PLFs and firmer yields, profitability remains limited. The industry’s interest coverage ratio is expected to remain at 1.5–1.7 times for FY2026. Large carriers benefit from parent backing, while others continue to face liquidity stress and stretched balance sheets.
The DGCA has proposed new passenger-centric norms allowing customers to cancel or modify tickets within 48 hours of booking without charges, provided the travel date is beyond five days (domestic) or fifteen days (international). Refunds are to be processed within 21 working days.
![Washington, United States: A United Airlines flight bound for Guatemala City made an emergency diversion to Washington Dulles International Airport after a passenger allegedly attempted to open a cabin door at cruising altitude and assaulted another traveler, according to air traffic control communications and federal authorities. The incident involved United Airlines Flight 1551, operated by a Boeing 737 MAX 8, which departed from Newark Liberty International Airport on Thursday evening carrying 145 passengers and six crew members. The aircraft had been en route to Guatemala City when the crew declared an emergency and diverted to Washington Dulles International Airport in Virginia. According to audio between the flight crew and air traffic controllers, the pilot informed controllers that the disruptive passenger attempted to open Door 2L while the aircraft was cruising at approximately 36,000 feet. The pilot also reported that the passenger later assaulted another individual onboard. During the exchange, the tower asked the crew which door the passenger had attempted to access. The pilot responded: “Door 2L at 36,000 feet and then [the passenger] assaulted a fellow passenger.” When controllers asked whether there were any injuries onboard, the pilot replied: “Not to our knowledge.” The aircraft landed safely at Washington Dulles at approximately 8:38 p.m. local time. Law enforcement and emergency personnel met the aircraft upon arrival. The FBI later confirmed that agents responded to the incident at the airport, although the agency did not immediately release additional details regarding the passenger’s identity, possible charges, or whether the individual was taken into federal custody. Flight tracking data showed the aircraft remained airborne for a period before diverting toward the Washington region instead of continuing south toward Guatemala. The diversion temporarily disrupted the scheduled international service but no injuries among passengers or crew were officially reported. United Airlines had not issued a detailed public statement at the time of publication regarding the circumstances surrounding the diversion or the status of the passenger involved. Federal authorities are expected to review crew reports, passenger statements, and onboard evidence as part of the investigation.](https://aviationtoday.in/wp-content/uploads/2026/05/AVIATION-TODAY-UNITEDV-AIRLINES-RUDE-PASSENGER-768x432.jpg)
