Domestic air passenger traffic hit 150 lakh in January, a 0.7% rise from December and 14.5% YoY growth. Despite a 1.2% capacity dip from December, it surpassed pre-Covid levels by 17.9%. International traffic for Indian carriers reached 249 lakh in FY2025, marking a 14.5% YoY increase and a 41.7% surge over pre-Covid figures.
While FY2025 expects 7-10% domestic growth, yield pressures persist as airlines balance fares with rising costs. ATF prices, down 8.1% YoY, remain 45.8% above pre-pandemic levels, impacting profitability. The industry forecasts Rs. 20-30 billion losses in FY2025 and FY2026 due to higher borrowing costs and yield challenges.
Supply chain issues and Pratt & Whitney engine failures have grounded 132 aircraft (15-17% of the total fleet), affecting capacity. Airlines face increased expenses from grounding costs, higher lease rates, and reduced fuel efficiency. However, strong yields, high passenger load factors, and partial OEM compensation help mitigate the impact.
Despite challenges, India’s aviation sector remains resilient, with improved connectivity, fleet expansion, and steady demand driving long-term growth.