India’s Domestic And International Air Travel Faces Challenges Amid Rising Global Tensions And Stagnant Growth: Here’s What Travelers Need To Know

Published on September 28, 2025

India’s aviation assemblage is facing a challenging period, pinch some home and world aerial recreation showing signs of stagnation and slower growth. Following a revised maturation forecast for FY2026, aerial recreation successful India is expected to turn astatine a overmuch slower gait than earlier projections. Factors specified arsenic world governmental instability, post-accident hesitancy, and reduced request person led to this adjustment. The study highlights that nan outlook for nan Indian aviation marketplace remains cautiously optimistic, though it faces important hurdles from some world and home challenges.

Revised Forecasts and Stagnant Growth

In precocious September 2025, Icra, a starring ratings agency, revised its maturation projections for FY2026, forecasting a home aerial postulation summation of conscionable 4-6%. This marks a crisp simplification from nan antecedently anticipated 7-10% growth. The revision comes connected nan backmost of respective world and section pressures, including geopolitical tensions, recreation hesitation pursuing craft accidents, and slowing waste and acquisition growth. As for world aerial travel, Icra has adjusted its maturation forecast to 13-15%, down from nan first 15-20%.

Passenger postulation successful August 2025 showed constricted progress. The full number of home passengers reached 13.17 million, which is conscionable 0.3% higher than nan aforesaid period successful nan erstwhile year, indicating minimal growth. This stagnation tin beryllium partially attributed to constricted hose capacity, which was down by 5.8% compared to August 2024. Notably, for nan first 5 months of FY2026, India’s home aerial postulation reached 6.775 cardinal passengers, a humble summation of 2.2% year-on-year.

Challenges for Domestic Air Travel: Reduced Capacity, Rising Costs

Despite nan flimsy maturation successful rider numbers, home airlines person faced respective headwinds. The number of disposable seats has not accrued successful statement pinch demand, pinch airlines cutting capacity, peculiarly for home routes. This whitethorn beryllium owed to a operation of operational issues, specified arsenic motor failures and attraction backlogs, which person grounded a important number of aircraft. For instance, complete 130 craft were grounded arsenic of March 2025, chiefly owed to engine-related issues pinch Pratt & Whitney engines.

Furthermore, nan costs of aviation turbine substance (ATF) remains a awesome facet impacting profitability. Although ATF prices saw a flimsy diminution of 1.4% successful September 2025, nan costs of substance averaged ₹95,181 per kiloliter successful FY2025, marking an 8% simplification year-on-year. Even pinch this dip, nan effect connected hose operating expenses is substantial, pinch substance and attraction costs comprising astir half of an airline’s expenses. The volatility of nan Indian Rupee (INR) against nan US Dollar besides adds uncertainty, particularly since galore aviation-related expenses are dollar-denominated.

International Air Traffic: A Slower Recovery

While home recreation has stagnated, world recreation has shown much promising signs of recovery. However, nan maturation complaint has been slower than expected. International rider postulation for Indian carriers roseate by 6.7% year-on-year successful July 2025, a important rebound from nan slowdown seen successful June 2025. This betterment was chiefly owed to a surge successful request aft a mid-year slump linked to geopolitical concerns and a diminution successful user assurance pursuing a high-profile craft incident.

For nan first 4 months of FY2026, world postulation stood astatine 11.73 million, representing a 10.2% year-on-year increase. While this is positive, it is beneath earlier projections, which had anticipated a higher maturation rate.

Airline Financial Outlook: Increasing Losses

Icra’s outlook for nan aviation assemblage besides indicates rising losses for nan industry. The agency projects that nan nett losses for airlines could summation to ₹95-105 cardinal successful FY2026, compared to ₹55 cardinal successful FY2025. Although this marks a important rise, it is still acold little than nan losses recorded successful FY2022 and FY2023, which stood astatine ₹216 cardinal and ₹179 billion, respectively.

The slow gait of betterment successful some home and world aerial traffic, mixed pinch nan rising costs of operations, is putting immense unit connected Indian airlines. Despite these challenges, Icra notes that airlines are still successful a amended position than successful erstwhile years, acknowledgment to operational improvements and financial support from genitor companies.

Supply Chain Struggles and Capacity Limitations

One of nan superior reasons for nan ongoing struggles successful nan aviation assemblage is nan proviso concatenation bottlenecks and attraction issues affecting hose fleets. A shortage of basal components, specified arsenic engines, has forced airlines to crushed a important number of aircraft, particularly those reliant connected Pratt & Whitney engines. This has led to a simplification successful wide capacity, making it difficult for airlines to meet rider request during highest seasons.

Additionally, airlines proceed to look shortages successful captious unit specified arsenic pilots and compartment crew, further hindering their expertise to grow operations. These operational challenges are apt to persist successful nan adjacent future, contributing to nan wide sluggishness successful aerial postulation growth.

Tips for Travelers: What Should You Expect?

For travelers, location are respective cardinal factors to support successful mind arsenic they navigate nan existent scenery of India’s aviation industry:

• Expect Higher Fares: Due to constricted capacity and rising substance prices, airfares are apt to stay connected nan higher broadside for some home and world flights.
• Plan for Delays and Cancellations: Airlines proceed to grapple pinch operational inefficiencies, truthful it’s advisable to cheque formation statuses regularly and see recreation security for added protection.
• Book Early for Better Deals: Given nan reduced spot availability, booking flights good successful beforehand could thief unafraid amended prices and preferred seating.
• Keep an Eye connected International Routes: While home aerial postulation is stagnating, world flights are showing a quicker recovery, particularly to destinations for illustration nan US and Europe. If you’re readying a travel abroad, now could beryllium a bully clip to book, arsenic capacity whitethorn stay tight.

Looking Ahead: What’s Next for India’s Aviation Industry?

The outlook for India’s aviation assemblage remains mixed. While location are signs of betterment successful world travel, home postulation maturation continues to look challenges. As airlines struggle to support profitability amid rising costs and constricted capacity, it will beryllium absorbing to spot really nan assemblage adapts to these pressures successful nan coming months.

As nan world and section business evolves, travelers and airlines alike will request to enactment flexible. The aviation industry’s expertise to retrieve will dangle connected nan solution of proviso concatenation issues, nan return of user confidence, and nan easing of geopolitical tensions. However, contempt these obstacles, nan Indian aviation marketplace remains a important subordinate successful nan world recreation ecosystem, pinch a promising early erstwhile these hurdles are overcome.