New Delhi: Rating agency ICRA (Investment Information and Credit Rating Agency) said on Thursday that India’s airlines could suffer deep losses next year due to the recession in air travel.
The agency has cut its forecast for the financial year (FY) 2026, stating that domestic passenger traffic is expected to increase by only 4-6%, below the earlier projection of 7–10% growth, approximately 172–176 million Flire.
With more aircraft connecting with airlines, while the demand slows down, the possibility of industry loss increases 95-105 billion, compared to 5.5 billion in FY2025, it said.
ICRA stated that passenger traffic increased only 4.4% compared to last year in the first quarter of FY2026, slowing the border tension slowed down from flight disruptions and the recent air India accidents declined. This reduced the airline’s earnings, with the average fare slipped 4-5% year-on-year.
“During FY2025, the Indian aviation industry benefited from better pricing power, clear, healthy demand for air travel in high yields. However, the atmosphere of demand in FY2026 has become more alert. ICRA has predicted reported to report widespread net damage to the Indian aviation industry. 95–105 billion in fY2026 compared to estimated 55 billion in FY2025. Senior Vice President and Co-Group Head of ICRA Kinjal Shah said that passenger traffic growth will slow down between the growing aircraft delivery period.
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Shah said that Shah said that due to the engine failures and the challenges of the supply chain, the total industry fleet was grounded by 20-22% September 2023. “This ratio is reduced to about 15–17% by March 2025 to correspond to about 130 aircraft.
A statement issued by the agency said, “In a long period of monsoon, there is a possibility of affecting air travel in July -August 2025 and now the business headwinds coming out of the US tariff are determined to reduce commercial sentiments in the upcoming quarters, bringing more circumferences to travel.”
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The prediction of damage by ICRA for FY2026, however, is much lower than those reported in FY2022 and FY2023. 216 billion and 179 billion respectively.
Talking about the total number of aircraft in the country, the ICRA said that in FY 2015, in addition to about 5% capacity, the industry saw that 855 aircraft reached 855 aircraft by 31 March this year.
Players of various industry have announced large aircraft purchases and, according to the signal number, the total pending aircraft delivery is more than 1,600, which is likely to be received in the next 10 years.
The agency said, “A large part of these is towards replacement of old aircraft with new fuel-skilled people.”
