India’s Domestic Air Passenger Traffic Under Pressure, Declines in September

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28.10.2026

India’s Domestic Air Passenger Traffic Under Pressure, Declines in September — Decline in Air Traffic

India’s domestic air travel market softened in September 2026 amid sluggish demand, high airfares, and operational constraints. During the same period, passenger load factors remained relatively stable despite cuts to capacity deployment, while the conflict in West Asia also affected international traffic.

Highlights

Domestic air passenger traffic stood at 118.2 lakh in September 2026, down 6.5% from September 2025 and 2.5% from August 2026.
Domestic traffic stood at 786.1 lakh in the first half of FY2027, down 1.9% year on year, while international traffic fell sharply by 19.3%.
High ATF prices, the conflict in West Asia, and airspace restrictions are putting near-term pressure on demand and profitability in the Indian aviation sector.

This article was translated from the original. Read the original version by our correspondent here.

September Traffic and Capacity Trends

According to ICRA, domestic air passenger traffic stood at 118.2 lakh in September 2026, down 6.5% from 126.4 lakh in September 2025 and 2.5% below 121.3 lakh in August 2026. In the same month, airlines’ capacity deployment was 8.1% lower than in September 2025 and 4.5% lower than in August 2026.

Despite weak demand, domestic airlines’ passenger load factor held at 81.1% in September 2026. This was broadly in line with 81.4% in September 2025 and above 79.0% in August 2026, mainly due to lower capacity deployment.

Impact on the First Half of FY2027

Domestic air passenger traffic stood at 786.1 lakh in the first half of FY2027, from April to September 2026, marking a 1.9% year-on-year decline. This follows modest growth of 1.2% in FY2026, when domestic traffic reached 1,674.2 lakh between April 2025 and March 2026.

International air passenger traffic carried by Indian airlines rose 3.9% to 350.0 lakh in FY2026. However, it fell sharply by 19.3% year on year in the first half of FY2027, mainly due to disruptions caused by the conflict in West Asia, airspace restrictions, and network disruptions.

High aviation turbine fuel (ATF) prices push up airfares, adding further pressure on demand for air travel. This trend points to near-term pressure on both demand and profitability in the Indian aviation sector.

Our previous report discussed the need to keep air travel affordable in India and the pressure on airfares from higher fuel and route costs following the conflict in West Asia. The article noted that high fares could weaken demand, while data pointed to a decline in domestic passenger traffic in August 2026 as well as a sharp drop in international traffic.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.

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