New Delhi: India’s aviation industry is projected to record a net loss in the range of Rs 20-30 billion in the financial year 2025-26 (FY26), broadly in line with the estimated losses for FY2024- 25 (FY25), according to the credit rating firm ICRA.
The firm said in a report that these losses are expected to continue compared to a net profit of around Rs 16 billion in FY2024 due to the anticipated pressure on yields as airlines strive to maintain adequate passenger load factors (PLF) amid continued aviation turbine fuel (ATF) prices.
The report stated that while demand for air travel remains robust, airlines are unlikely to raise ticket prices significantly due to competitive pressures and price sensitivity in the domestic market. This, coupled with costlier fuel, is expected to eat into profitability.
Adding to the financial strain, interest costs are likely to rise in FY26 due to growing lease liabilities, as several airlines have scheduled aircraft deliveries. The increased debt burden is expected to raise financing costs, further compressing margins.
Despite these challenges, the projected losses for FY26 are a marked improvement compared to the massive setbacks of the past. The industry had posted staggering net losses of Rs 235 billion in FY22 and Rs 174 billion in FY23, largely driven by COVID19-related disruptions and fuel cost volatility.
Financial resilience, however, is slowly improving. The sector’s interest coverage ratio, a key indicator of its ability to service debt, is expected to range between 1.5 and 2.0 times in FY26, suggesting relatively stable debt-servicing capacity even amid bottom-line pressures.
For June 2025, domestic air passenger.
