Domestic air passenger traffic up 5% yoy in June 2025: ICRA
Resilient demand led domestic air passenger traffic to rise by 5.1 per cent on a year-on-year basis in June 2025, credit ratings agency ICRA said.
Accordingly, the traffic was estimated at 138.7 lakh, 5.1 per cent higher than 132.1 lakh in June 2024.
However, the traffic witnessed a marginal decline of 1.3 per cent on a sequential basis during the month under review.
On the other hand, airlines’ capacity deployment in June 2025 was 4.9 per cent higher than in June 2024; however, it was 2.3 per cent lower compared to May 2025.
“ICRA’s outlook on the Indian aviation industry is ‘Stable’. However, emerging geopolitical and operational headwinds—in the form of rising crude oil prices (because of the Israel-Iran conflict), closure of the airspace over Iran and Pakistan (for Indian carriers), probable rise in insurance premia (after the recent aeroplane crash), and possible hesitation to travel—warrant close monitoring for potential downside risks,” the ratings agency said.
“The operating costs for the Indian aviation industry are likely to have increased in the past couple of months (due to flight cancellations and other operational challenges following the India–Pakistan conflict).”
Nevertheless, the agency cited that the overall passenger traffic and the pricing so far have remained steady.
“The industry witnessed steady pricing power in FY2025, with stable yields. Domestic air passenger traffic growth tapered to 7.6 per cent in FY2025, in line with ICRA’s expectations, given the high base of FY2024 and lower traffic in H1 FY2025, which was impacted by severe heatwaves and other weather-related disruptions,” the ratings agency said.
“Domestic air passenger traffic is estimated to grow by 7-10 per cent in FY2026. However, yields may come under pressure as airlines strive to maintain adequate passenger load factors (PLFs).”
ICRA added that international passenger traffic for Indian carriers is expected to grow by 15-20 per cent in FY26.
“However, it remains a monitorable, given the recent geopolitical concerns.”
Published on July 12, 2025
