Why India’s domestic air passenger traffic is falling despite summer travel

Indian domestic aviation recorded only 13,814,816 passengers in April, a drop of over 3% compared to April last year, as the West Asia war and financial headwinds kept passengers in a “wait-and-watch” mode. This was also the lowest monthly passenger count of 2026, erasing all gains made in January and February.

The first four months of 2026 have kept air traffic largely flat compared to last year, with the possibility of further downside as the industry enters the lean months of June, July, and August, during which airlines have curtailed capacity. Departures were already down 2% in April compared to the same month last year.

Even as the market shrank, IndiGo gained market share, climbing back to 65% (up 1.7 percentage points from the previous month), while the Air India Group, reeling under massive losses, dropped below the 25% mark and ended April with a market share of 24.7% (down 1.5 percentage points from the previous month).

Akasa Air has firmly established itself as the third-largest carrier in Indian skies with a 5.8% market share, while SpiceJet slipped further to just 3.4%. SpiceJet had a turbulent April, with on-time performance dropping to an abysmal 31.2% across the 10 major airports monitored by the regulator, the Directorate General of Civil Aviation (DGCA). For context, IndiGo recorded a better on-time performance in December, when it faced an operational meltdown.

Not only did SpiceJet underperform on punctuality, but more than 12% of its flights were delayed by over two hours, according to data released by the DGCA.

Impact reaches home?

The current economic pressures, coupled with prevailing uncertainties, have also led to passenger cancellations during a month that traditionally marks the end of the examination season and the beginning of summer vacations across the country.

Indian carriers have a sizable international presence, and that segment also declined in April. Compared to April 2025, which had already been impacted by the terror attack in Pahalgam, April 2026 witnessed a 37.2% reduction in flights operated by Indian carriers and a 39.3% drop in passengers carried.

This also affects domestic traffic, as many international travellers connect through domestic flights to reach their final destinations within the country.

Historically, April has seen load factors rise over March. This year, however, the Air India Group, IndiGo, SpiceJet, and regional carrier Fly91 all reported lower load factors in April than in March. Akasa Air was the only major airline to record an increase in load factor.

Passengers have become more cautious about travel as the AI revolution affects jobs in service industries, particularly the information technology sector, which has traditionally been a high-spending customer segment. The heatwave across the country has also contributed to keeping passengers grounded.

Tail Note

Indian aviation has historically been highly resilient. Even in the year when a major carrier like Jet Airways collapsed, the industry managed to carry more passengers than the previous year. The recovery following COVID-19 was also much faster than industry body IATA had predicted, and every year since 2023 has recorded higher traffic than the one before.

However, the first four months of 2026 have generated traffic levels similar to those of 2025. With eight months still remaining in the year, how will the Indian aviation industry perform?

Much will depend on how the war in West Asia evolves, especially as the fragile ceasefire has broken down in recent days.

IndiGo lost more than ₹2,500 crore last year, with a significant portion attributed to foreign exchange losses. A prolonged war could place additional pressure on passengers through higher oil prices and a rupee that continues to weaken.

Air India reportedly lost nearly ten times that amount, although a substantial share of those losses can be attributed to transformation costs rather than purely operational losses.

So far, the government has controlled Aviation Turbine Fuel (ATF) pricing for domestic flights, capping increases at around 25%, even as global oil prices doubled. However, this may not be sustainable indefinitely.

The next few weeks will be crucial for airlines as they assess demand, costs, and the broader outlook for the remainder of the year. For now, hopes are pinned on the Diwali holiday period and the wedding season to offset losses and drive growth in passenger traffic and capacity during the latter part of the year.