Domestic air passenger traffic has been estimated at 137.2 lakh1 in June 2026, 0.9% higher than 136.0 lakh in June 2025 and 10.8% lower than 153.9 lakh in May 2026. The airlines’ capacity deployment in June 2026 was 5.5% lower than June 2025 and 12.3% lower than May 2026. Amid a sluggish demand environment, domestic carriers achieved a higher passenger load factor (PLF) of 90.2% (estimated) in June 2026 against 84.5% in June 2025 and 85.9% in May 2026, on the back of lower capacity deployment owing to operational disruptions. Domestic air passenger traffic in Q1 FY2027 (April–June 2026) is estimated at 429.3 lakh, a year-on-year (YoY) growth of 2.3%. In FY2026 (April 2025-March 2026), the same was 1,674.2 lakh, reflecting a modest YoY growth of 1.2%. The international air passenger traffic for Indian carriers grew by 3.9% to 350.0 lakh in FY2026. However, the same declined sharply by 31.6% YoY in 2M FY2027 (April–May 2026) during the disruptions caused by the West Asian conflict.

• Negative outlook on the Indian aviation industry – ICRA has a Negative outlook on the Indian aviation industry reflecting the expected weakening of the revenue per available seat kilometre – cost per available seat kilometre (RASK-CASK) spread due to hardening of aviation turbine fuel (ATF) prices and disruptions in the availability of certain international airspaces starting February 28, 2026, following escalation of the conflict in West Asia, coupled with continued depreciation of the INR against the USD. ICRA forecasts domestic air passenger traffic growth at 3-6% in FY2027, while international air passenger traffic growth (for Indian carriers) is projected at 0-3%.
• ATF prices in July 2026 remained unchanged for both domestic and international routes on a sequential basis – The ATF prices announced on July 1, 2026, were kept unchanged for both domestic and international routes vis-à-vis June 2026 prices. The ATF prices for domestic routes have been kept unchanged since April 2026, in the absence of any price revisions by oil marketing companies (OMCs) during the period. However, the prices for domestic routes in July 2026 are still higher by 18.0% on a YoY basis. For international operations, the ATF prices in July 2026 remained unchanged on a sequential basis.