Aviation losses are set to widen sharply in FY2026, with the Investment Information and Credit Rating Agency (ICRA) warning that the Indian airline industry will face deeper financial stress despite modest growth in passenger traffic.

The ratings agency has projected industry-wide net losses of Rs 95-105 billion in FY2026, compared to around Rs 55 billion in FY2025. It said losses will rise principally due to a slowdown in passenger traffic growth amid a period of rising aircraft deliveries.

The agency also flagged multiple stress factors, including rising fuel prices, forex losses, aircraft groundings, supply chain issues and stretched liquidity for select airlines.

According to the report, these factors have adversely impacted airlines’ cost structures. The agency has retained a stabl

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