Passenger traffic declines in five of six months amid West Asia crisis

This marks a sharp reversal from the first quarter, when traffic grew 1.7% year-on-year to 42.67 million passengers from 41.98 million. The May holiday-season surge helped the April-June quarter remain in positive territory, but the subsequent three months saw passenger numbers fall consistently. 62 million domestic passengers, down 1.9% from 80.17 million a year earlier, according to data from the Directorate General of Civil Aviation (DGCA).

The slowdown has also been uneven across airlines. Air India Group’s domestic passenger traffic declined 8.2% to 19.8 million crore in April-September from 21.62 million a year earlier. IndiGo carried 51.59 million passengers, marginally lower than 51.68 million in the year-ago period. Akasa Air, however, recorded growth of 6.9% to 4.54 million passengers. SpiceJet saw a 12% decline to 1.52 million.

The decline in domestic passenger traffic gathered pace in the second quarter, with September recording the steepest year-on-year contraction of 6.5% to 11.82 million passengers. Traffic fell 6.3% in August to 12.13 million and 4.8% in July to 12.00 million, marking three consecutive months of declining passenger volumes and a sharp deterioration from the first quarter. In April-June, the decline was relatively contained, partly because of a 9.5% surge in May, when passenger traffic rose to 15.39 million — the highest monthly volume in the six-month period, coinciding with the summer holiday season.

April, when the West Asia conflict escalated, had recorded a 3.5% decline to 13.82 million passengers, while traffic fell another 1% in June to 13.47 million. The weakening demand comes at a difficult time for airlines, which are grappling with a sharp increase in aviation turbine fuel (ATF) prices following the escalation of the West Asia conflict. Domestic ATF prices in Delhi rose to ₹137 per litre in October 2026 from ₹96.64 per litre in March, an increase of nearly 42%.

To cushion airlines from the international price volatility, the government approved budgetary support of up to ₹10,000 crore for oil marketing companies in June under an ATF price stabilisation mechanism. However, fuel costs have remained elevated, putting further pressure on airline profitability. Fuel typically accounts for 30-40% of an airline’s operating costs, making the increase a significant hit to profitability.

Airspace restrictions have added to the burden on international operations, forcing some carriers to take longer routes and incur additional fuel and crew costs. Airlines have responded with fuel surcharges and fare revisions, while reviewing capacity deployment and trimming services that offer weaker returns. The strategy is increasingly shifting from expansion to protecting yields. Carriers are under pressure to deploy aircraft on routes with stronger demand and better pricing power, while reducing frequencies or withdrawing capacity from sectors that are unable to absorb higher operating costs. Such rationalisation can help protect margins, but it also limits available seats and may constrain traffic growth.