ICRA Lowers FY2025 Domestic Air Traffic Growth Estimates to 7-10%

Rating agency ICRA has revised its domestic air passenger traffic growth estimates for FY2025 to 7-10%, down from 8-13%, due to a high base in FY2024 and reduced passenger traffic in Q1 FY2025, affected by severe heatwaves and weather disruptions. Domestic passenger traffic is expected to reach 164-170 million, while international traffic for Indian carriers is projected to grow by 15-20%.

ICRA maintains a stable outlook on the Indian aviation industry, citing improved pricing power and a stable cost environment. However, the industry is expected to face a net loss of ₹20-30 billion in FY2025 and FY2026 due to pressure on yields and rising aviation turbine fuel (ATF) prices. Despite this, better pricing discipline and stable costs have led to lower-than-expected losses compared to previous estimates.