Indian aviation industry takes off as FY24-25 closes with 7.8% growth

India's aviation sector has soared to new heights, concluding the fiscal year 2024–25 with a robust 7.8% year-on-year increase in domestic air passenger traffic, reaching approximately 165.7 million travelers. This significant growth underscores the industry's resilience and recovery amidst various operational challenges.​

According to the latest data released by ICRA (formerly Investment Information and Credit Rating Agency of India Limited), domestic air traffic for March 2025 was estimated at around 14.88 million passengers. This figure marks an 11.3% rise compared to March 2024 and a 5.9% increase over February 2025, which recorded 14.04 million passengers.​ 

Despite facing hurdles such as supply chain disruptions and engine reliability issues, particularly with Pratt & Whitney engines affecting carriers like IndiGo and Go Airlines, the industry has demonstrated remarkable adaptability. These challenges led to significant fleet groundings and operational delays, yet the sector managed to maintain an upward trajectory.​ 

ICRA notes that while the pace of earnings recovery is expected to be gradual due to the high fixed-cost nature of the aviation business, the outlook remains stable. The agency estimates a net loss of INR2,000–3,000 crore for the industry in FY25 and FY26, a shift from the approximate INR1,600 crore net profit reported in FY24. This anticipated downturn is attributed to sustained pressure on yields as airlines strive to maintain adequate passenger load factors amid elevated aviation turbine fuel (ATF) prices.​ 

Additionally, higher borrowing costs, stemming from increased lease liabilities associated with scheduled aircraft deliveries, are likely to elevate the interest burden for airlines. Nevertheless, ICRA anticipates a year-on-year revenue growth between 18% and 20% for the current fiscal year, driven by sustained improvements in passenger traffic, tariff adjustments, and the expansion of non-aeronautical revenue streams.​ 

The Indian aviation industry's performance in FY25 reflects a resilient recovery and positions it for continued growth, provided that operational efficiencies are enhanced and cost challenges are effectively managed.