Why Indian Airlines’ Losses Are Set to Widen in 2026
Photo Credit: The Indira Gandhi International Airport in Delhi. Delhi Airport
Skift Take
As geopolitical tensions and mass tragedy-led demand disruptions threaten to widen losses for Indian airlines, carriers would need to figure out how they can leverage their improved pricing power without losing price-sensitive Indian passengers.
The losses of Indian airlines are projected to nearly double in the 2025-26 financial year, reaching INR 95–105 billion ($1–1.2 billion), according to credit rating agency ICRA. This compares with a loss of INR 55 billion ($624 million) in the previous year.
ICRA also expects domestic passenger traffic to rise modestly to 172–176 million in fiscal 2026, a growth of just 4–6% compared to the previous year. This is lower than its earlier forecast of 7–10% growth.
“This slowdown in passenger traffic growth at a time when aircraft deliveries are rising, is estimated to widen the net loss of the Indian aviation industry,” ICRA said in a statement.
In the first quarter of the 2026 financial year, cross-border tensions between India and Pakistan led to flight disruptions and cancellations. Passenger sentiment was further dampened by travel hesitancy following the June 12 Air India crash.
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