Aviation industry projected to post up to Rs 18K cr loss in FY26

Mumbai: The domestic aviation industry is estimated to post around Rs17,000-18,000 crore net loss in the current fiscal year on account of a likely lower passenger traffic, among other factors, ratings agency Icra said on Monday.

Earlier, the industry was projected to post a loss of Rs 9,500-10,500 crore during 2025-26.

Icra has also revised downward its forecast for domestic air passenger traffic growth to 0-3 per cent in FY26 on account of multiple factors, including Air India Boeing 787-8 plane crash in June this year and thousands of flights cancellations by IndiGo earlier this month, among others. 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, the ratings agency said.

This revision reflects a slower-than-expected traffic growth in April-November period of FY26, which was impacted by cross-border escalations that led to flight disruptions and cancellations during the year, along with the (Air India) aircraft accident tragedy in June that made travellers hesitant at least during the period immediately post the accident, Icra said. It also reflects the impact on business travel owing to headwinds stemming from US tariffs, the ratings agency said, adding that downward revision is also due to the impact of operational dis-ruptions at IndiGo from December 3-8, which resulted in cancellation of around 4,500 flights.

While the IndiGo flight cancellations accounted for only about 0.4 per cent of the total annual industry departures, Icra said it expects the travel sentiments to dampen in the aftermath of the IndiGo episode.

Icra said it has also revised its international air passenger traffic growth forecast for Indian carri-ers for this fiscal year to 7-9 per cent from its earlier projection of 13-15 per cent.