Domestic air traffic shrinks in March as West Asia war impact reaches Indian skies

Airlines in India carried 1.43 crore passengers in March 2026, 1.2% lower than last March and 38,768 passengers a day lower than in February 2026, the preceding month. In March 2026, domestic traffic in India stood at 1,43,69,830 passengers, while last March, 1,45,41,682 domestic passengers flew. The drop is an indicator that the West Asia war is reaching domestic shores. Airlines deployed 3.25% fewer flights this March, compared to last year, while sequentially, the drop was a modest 10 flights a day.

Air India group has seen a decline in market share with the two airlines accounting for 26.3% in March (27% in February), while last March, it had 26.7% market share in domestic traffic. IndiGo has lost half a per cent share compared to the previous year, with a marginal increase on a month-over-month basis. Akasa Air has grown its market share, now crossing 5% as it recorded 5.4% domestic market share in March. SpiceJet, which has been surviving amid these current headwinds, ended March with a market share of 3.8%.

The load factors were also under pressure. Air India and Air India Express saw a 5% dip in load factor in March over February, while IndiGo also saw a 6% dip. Akasa Air, though seeing a dip, held on to the 90% load factor.

Connecting passengers, economic pressures

One reason for the reduction in traffic is also the reduced connecting traffic. India has limited international airports, and thus, the traffic moves on domestic flights to the final destination. A reduction in flights to the Gulf and cancellation of trips by many passengers also had a corresponding impact on domestic traffic.

The economic pressures in current times, along with the uncertainties involved, have partially led to cancellations for passengers as well, in a month that traditionally sees lower traffic due to exam season in the country.

As we turn the page from April to May, air traffic could improve a little, as airlines adjust capacity from international skies to domestic. The Indian government came to the rescue of Indian carriers, capping the hike in ATF prices for domestic consumption, while international flights are being priced at market rate. Last year, the events at Pahalgam and Operation Sindoor meant that May was muted in terms of traffic. The airlines are coming a full circle, but at a cost which will impact later, to both the airline and the customer.

Tail note

Indian aviation is facing a lot of headwinds after the previous year, which was forgettable at best. The only solace has been the government buffering the hike in oil prices for airlines, capping it rather than allowing a near doubling.

However, the January to March quarter has ended higher than the same quarter last year, indicating that resilience exists, though it remains to be seen how long it will last. Indian air traffic has continued to grow even in the worst of times. In 2019, when Jet Airways collapsed, the year ended with higher traffic than 2018. The recovery post-COVID was much faster than what the International Air Transport Association had anticipated, and even with supply chain constraints, growth continued in 2023, 2024 and 2025, even though it remained lower than projections.

With nine months ahead of us, things could take a dramatic shift for the better; but the risk of a longer conflict looms higher than ever for aviation, as the region not only remains deadlocked but also has a direct implication on the oil prices, which constitute anywhere between 35-45% of expenditure for an airline in India. This increase will have an operational impact, but also have an impact on the spending possibilities for people as it impacts overall inflation, leading to potential passengers muting their spending for the time being.

The author, Ameya Joshi, is an aviation analyst.