ICRA reports that the Indian aviation industry outlook for 2025-26 remains stable, with domestic air passenger traffic expected to grow by 7-10 per cent and international traffic by 15-20 per cent.
INDIAN aviation industry’s outlook for 2025-26 remains stable, driven by expectations of moderate growth in domestic air passenger traffic and a relatively stable cost environment, according to rating agency ICRA.
The domestic air passenger traffic is estimated to grow at 7-10 per cent in 2025-26.
However, the yields for airline operators are likely to be under pressure, as airlines strive to maintain adequate passenger load factor (PLF). International passenger traffic for Indian carriers is expected to grow by 15-20 per cent in 2025-26.
“The movement in the yields will remain monitorable, amid elevated aviation turbine fuel (ATF) prices and depreciation of the INR vis-a-vis the USD over pre-COVID levels, both of which have a major bearing on the airlines’ cost structure,” ICRA said in its aviation-specific report.
Fuel cost accounts for 30-40 per cent of the airlines’ expenses, while 35-50 per cent of the operating expenses, including aircraft lease payments, fuel expenses and a significant portion of aircraft and engine maintenance expenses, are denominated in dollar terms.
“The airlines’ efforts to effect fare hikes, proportionate to their input cost increase, will be the key to expand their profit margins,” ICRA said. — ANI
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