{"id":186972,"date":"2025-11-18T11:07:13","date_gmt":"2025-11-18T11:07:13","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/186972\/"},"modified":"2025-11-18T11:07:13","modified_gmt":"2025-11-18T11:07:13","slug":"geopolitical-flare-ups-ai-crash-tariff-shocks-to-dampen-indias-air-travel-demand-in-fy26-icra-says","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/186972\/","title":{"rendered":"Geopolitical flare-ups, AI crash, tariff shocks to dampen India\u2019s air travel demand in FY26, ICRA says"},"content":{"rendered":"

India\u2019s air travel demand is expected to grow only modestly in FY26 as a series of external shocks weigh on sentiment, ICRA<\/a> said in a report released Tuesday. <\/p>\n

The rating agency, which maintained a Stable outlook on the aviation sector, driven by expectations of modest growth in domestic air passenger traffic<\/a> in FY2026 at 4-6%.<\/p>\n

According to ICRA, growth has been tempered by \u201ccross-border escalations,\u201d the \u201caircraft accident tragedy in June 2025,\u201d and \u201ctrade headwinds stemming from US tariffs,\u201d all of which have added uncertainty for carriers and passengers.
The combination of geopolitical flare-ups, safety-related hesitancy and weakening business confidence is expected to keep travellers cautious through the coming quarters.<\/p>\n

Despite the subdued domestic outlook, ICRA anticipates stronger momentum on overseas routes, projecting international air passenger traffic for Indian carriers to grow 13\u201315% in FY2026. <\/p>\n

\"ETLive Events
The assessment comes alongside the latest operational data, including domestic traffic of 142.8 lakh in October: up 4.5% year-on-year, which the agency noted in its monthly and sectoral update.October air traffic sees steady uptickICRA\u2019s latest update showed that domestic air passenger traffic in October was estimated at 142.8 lakh, marking a 4.5% rise over October 2024 and a 12.9% increase over September 2025. Airlines deployed 1.7% more capacity year-on-year during the month, with a sharper 10.8% sequential increase as carriers ramped up operations ahead of the festive period. For the April\u2013October period, domestic traffic stood at 944.5 lakh, reflecting a muted 1.6% year-on-year growth.<\/p>\n

The rating agency noted that international passenger volumes for Indian carriers remained on a stronger trajectory. For September 2025, international traffic stood at 28.3 lakh, up 5.8% year-on-year despite a sequential dip of 5.7%. <\/p>\n

Cumulatively, international traffic for the first half of FY26 rose to 175.6 lakh, a 9.1% increase over the previous year. In comparison, full-year FY25 international traffic had grown 14.1% to 338.6 lakh.<\/p>\n

Rising fuel costs, forex pressure and fleet challengesICRA also flagged cost-side pressures that continue to strain airlines\u2019 financials despite stable demand. The agency highlighted that the average ATF price<\/a> in FY25 was Rs 95,181\/KL, down 8% year-on-year, but noted that prices rose 0.8% month-on-month in November 2025 and 4.4% on an annual basis. <\/p>\n

The weakening of the rupee in Q2 FY26 resulted in \u201clarge forex losses,\u201d most of them unrealised, while supply-chain and engine-related issues continued to impact fleet availability. <\/p>\n

As of March 31, 2025, around 133 aircraft\u2014or 15\u201317% of the total industry fleet\u2014were grounded due to engine failures and component shortages, affecting capacity and elevating operating costs.<\/p>\n","protected":false},"excerpt":{"rendered":"India\u2019s air travel demand is expected to grow only modestly in FY26 as a series of external shocks…\n","protected":false},"author":2,"featured_media":186973,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[105013,105011,105012,105009,79,105008,179,18,105010,105004,105006,19,105005,105007,17,23809],"class_list":{"0":"post-186972","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-aircraft-accident-june-2025","9":"tag-airline-financial-pressures","10":"tag-average-atf-price","11":"tag-aviation-sector-outlook","12":"tag-business","13":"tag-domestic-air-passenger-traffic","14":"tag-economy","15":"tag-eire","16":"tag-geopolitical-influences-on-travel","17":"tag-icra","18":"tag-icra-report-fy26","19":"tag-ie","20":"tag-india-air-travel-demand","21":"tag-international-air-traffic-growth","22":"tag-ireland","23":"tag-us-tariffs-impact"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115570386367254989","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/186972","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=186972"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/186972\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/186973"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=186972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=186972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=186972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}