India’s air passenger traffic rose 2.6 per cent year-on-year to 202 million in the first half of FY26, up from 197 million a year earlier, according to a report by CareEdge Ratings. The rise reflects continued strength in air travel demand, though the overall pace has been tempered by operational and supply-side challenges.

Domestic passenger traffic grew by 1.6 per cent, while international traffic expanded 6.9 per cent during April–September 2025. The data underscores that overseas travel is recovering faster than the domestic segment, aided by easing visa norms and expanding route networks. CareEdge noted that despite steady demand, constraints such as limited aircraft capacity and maintenance-related groundings have weighed on domestic growth.

Full-year projection revised down amid operational headwinds

For the full fiscal year, total passenger traffic is now projected at about 430 million, lower than the earlier estimate of 445 million. The report cited cross-border tensions in the first quarter of FY26, reduced fleet availability following safety inspections after the June 2025 aircraft accident, and delays in the delivery of wide-bodied aircraft as key reasons for the downward revision.

Domestic traffic is expected to grow by around 3.5 per cent in FY26, while international traffic could see an 8 per cent rise, supported by festive travel and the commissioning of two new greenfield airports that will help ease capacity bottlenecks.

Despite short-term challenges, the outlook for India’s aviation sector remains positive. CareEdge expects passenger traffic to grow at a compound annual rate of 8–9 per cent over the medium term, supported by rising disposable incomes, favourable demographics, and a growing middle class increasingly turning to air travel.

The report highlighted that new airport projects and airline fleet expansion are likely to strengthen connectivity and regional growth. However, it emphasised that timely aircraft deliveries and the operational readiness of upcoming airports will be crucial in sustaining this momentum.

Financially, India’s airport operators are positioned on a strong footing. Across 11 major airports assessed by CareEdge, operating income is projected to grow more than 40 per cent year-on-year, while aero revenues are expected to jump nearly 50 per cent.

This improvement reflects robust recovery in passenger traffic, higher retail and parking revenues, and controlled operating costs, helping offset earlier pandemic-era losses.

India remains one of the fastest-growing aviation markets in the world. The steady expansion of passenger traffic – despite supply constraints points to underlying demand resilience.