Airport passenger traffic growth to post-Covid lowest in FY26: ICRA 

India’s air traffic is likely to see the lowest growth post Covid-19, with rating agency ICRA revising its projection for the growth of overall air passenger traffic in FY26 to around 5-7% YoY to reach 430-440 million from its earlier estimate of 7-9%.

The downward revision is a result of the cross-border tensions and lower aircraft availability owing to fleet inspections after the fatal crash in Ahmedabad in June, which compressed passenger traffic growth in the first five months of FY26. 

The 5-7% growth in FY26 is likely to be the lowest post-Covid.

The moderate growth in FY26 will be supported by strong expansion in international travel amid improving connectivity to newer destinations, continued uptick in leisure and business travel in the domestic segment and start of operations of new greenfield airports in H2 FY26. 

Nevertheless, geopolitical tensions and US trade wars are likely to pose a threat to these estimates.

The passenger traffic for 5M FY26 recorded a modest rise of 3% to 170 million compared to 165 million in 5M FY25, lower than ICRA’s earlier estimates. 

The domestic passenger traffic growth is expected to moderate to 4–6% to reach 348–355 million in FY2026, amid lower growth of 2.6% registered during 5M FY26.

However, international passenger traffic is likely to see a better growth of 7-10% in FY26 to reach around 82-85 million in FY26.

“International traffic continues to outpace domestic traffic growth, driven by healthy international tourism activity, along with improved connectivity to newer destinations,” said Vinay Kumar G, Sector Head, Corporate Ratings, ICRA.

The healthy rise in international traffic will augur well for the airport sector, given that it is relatively more remunerative than domestic traffic.