Indian Aviation Crisis Deepens: ₹18,000 Cr Loss Ahead

India’s aviation sector is likely to face major financial pressure in FY2026. Losses are projected to reach ₹17,000 to ₹18,000 crore, according to ICRA reports.

The agency has revised its outlook from stable to negative. This shift is due to rising fuel costs, currency depreciation and ongoing geopolitical disruptions.

A key concern is the sharp rise in aviation turbine fuel prices. This increase is linked to Brent crude climbing to around $105 per barrel.

Fuel accounts for nearly 30% to 40% of airline operating costs. Prices have already risen both sequentially and on a yearly basis.

At the same time, the weakening rupee is adding more pressure. Many airline expenses such as leasing and maintenance are priced in dollars.

Demand growth is also slowing down. Domestic passenger traffic is expected to grow by only 0% to 3%, while international traffic may increase by 7% to 9%.

These projections carry risks due to higher ticket prices and ongoing disruptions. This could impact travel demand further.

Operational issues continue to affect airlines. Around 13% to 15% of aircraft are grounded due to supply chain and engine related problems.

Despite these challenges, load factors remain strong. This suggests that demand is still holding steady amid limited capacity.

However, rising costs and falling interest coverage ratios point to weakening financial health. Airlines may find it harder to sustain profitability.

Overall, the aviation sector appears to be entering a difficult phase. Future stability will depend on cost control and global fuel and geopolitical conditions.