Summary:

Domestic aviation traffic in India is expected to rise by 7-10% to 164-170 million in FY25, according to ICRA. Domestic passenger traffic reached 79.3 million in the first half of FY25, showing a 5.3% year-on-year increase despite weather disruptions. International traffic for Indian carriers grew by 16.2%. However, ICRA forecasts a net loss of US$ 236.4-354.5 million in FY25 due to rising fuel prices, with improved airline pricing power providing some relief.

ICRA maintains a stable outlook for the aviation industry, estimating a loss of US$ 236.4-354.5 million (Rs. 2,000-3,000 crore) in FY25 and FY26 due to higher fuel prices and operational costs. However, the outlook for H2 FY25 is positive, with a yield recovery and strong passenger volume. ATF prices fell by 6.8%, though they remain above pre-Covid levels. Fuel costs account for 30-40% of airline expenses.

Source: IBEF

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