India's domestic air travel sector faces a challenging outlook for FY26, with passenger growth estimated to be between 0 and 3%, its slowest since the COVID-19 pandemic. According to industry ratings, the growth has been hampered by fleet shortages, safety inspections following recent accidents, and geopolitical issues affecting international routes.
Despite robust passenger demand, capacity constraints have persisted, with approximately 13-15% of aircraft fleets grounded due to engine failures and supply chain issues. These limitations have led to operational delays and reduced flight frequencies, particularly impacting international travel where airspace restrictions have rerouted long-haul flights and driven up fuel costs.
Major Indian airlines — including IndiGo, Air India, Akasa Air, and SpiceJet — currently operate a combined fleet of over 800 aircraft, with plans to expand significantly by 2035. Industry experts remain optimistic about future demand, but caution that supply chain disruptions and geopolitical tensions could delay delivery schedules and hinder overall growth. Analysts expect the sector to incur losses of approximately ₹17,000-18,000 crore in FY26, with a less certain outlook for recovery in FY27.
