India's domestic aviation sector showed mixed signals in November 2025, with passenger traffic registering healthy month-on-month growth even as ratings agency ICRA significantly revised down its annual growth projections and loss estimates for the industry. The latest data reveals both operational resilience and underlying structural challenges facing the sector.

November Traffic Performance Shows Recovery

Domestic air passenger traffic rose to an estimated 154.5 lakh in November 2025, marking an 8.4% year-on-year increase and a robust 10.1% sequential rise from October's 140 lakh passengers. The growth was supported by stable capacity deployment, with airlines maintaining capacity levels 4.6% higher than the previous year and largely flat compared to October 2025.

For international operations, Indian carriers transported 29.9 lakh passengers in October 2025, registering 8.3% year-on-year growth and 6.0% increase over September. Cumulatively, international passenger traffic reached 205.5 lakh during the first seven months of FY26, up 9.0% year-on-year.

ICRA Revises Growth Forecasts Downward

Despite the positive November numbers, ICRA has significantly revised its domestic air passenger traffic growth forecast for FY26 to 0-3%, down from its earlier estimate of 4-6%. The revision reflects slower-than-expected traffic growth during the April-November period, with cumulative domestic traffic standing at 1,096.5 lakh passengers, reflecting modest 2.2% year-on-year growth.

The agency has also cut its international passenger traffic growth forecast for FY26 to 7-9% from the earlier projection of 13-15%. However, ICRA projects growth to recover to 6-8% in FY27, though on a lower base than earlier anticipated.

Operational Disruptions Impact Industry Sentiment

Several factors contributed to the downward revision of traffic projections. The June 2025 aircraft accident temporarily dampened travel sentiment, while cross-border escalations led to flight disruptions earlier in the year. Business travel faced pressure from US tariff-related headwinds, and IndiGo's flight cancellations in early December 2025 resulted in approximately 4,500 cancelled flights.

While the IndiGo cancellations accounted for only about 0.4% of total annual industry departures, ICRA noted that the episode is expected to weigh on passenger sentiment in the near term.

Cost Pressures Intensify Loss Projections

Cost pressures remain elevated, with aviation turbine fuel (ATF) prices rising 8.5% year-on-year and 5.3% sequentially in December 2025. After remaining lower on average in FY25, fuel prices have risen consistently on both year-on-year and month-on-month basis since October 2025, adding to airline profitability challenges.

Reflecting these operational and cost pressures, ICRA expects the Indian aviation industry to post a net loss of ₹170-180 billion in FY26, significantly higher than its earlier estimate of ₹95-105 billion. Despite the challenges, the agency has maintained a Stable outlook on the aviation sector, expecting the current disruptions to be temporary.

Air travellers are set to benefit from enhanced connectivity between India and Europe as two major Indian carriers announce significant route expansions for 2026. Air India has confirmed the resumption of flight services to Rome after a six-year hiatus, while IndiGo moves forward with its Delhi-London Heathrow service launch plans.

Air India Returns to Rome

Air India will resume operations to Italy's capital city beginning March 25, 2026, marking the airline's return to Rome after suspending services in early 2020 due to the Covid-19 pandemic. The service will operate four times weekly between Delhi and Rome's Leonardo da Vinci International Airport (Fiumicino).

"Connecting India to more of the world remains one of our top priorities. India and Italy share deep-rooted commonalities in culture, business and trade, which makes Rome a natural addition to Air India's expanding network," said Nipun Aggarwal, Chief Commercial Officer, Air India.

IndiGo's Delhi-London Service Launch

IndiGo has confirmed its Delhi-London Heathrow service will commence February 2, 2026, operating five times weekly using wet/damp leased Boeing 787 aircraft. The service will feature a dual-class configuration with IndiGoStretch and economy class options.

This addition will bring IndiGo's total London operations to 12 weekly flights, complementing its existing daily Mumbai-London Heathrow service.

Strategic Network Expansion

With Rome's addition, Air India now serves eight points in Europe and three points in the UK. The non-stop service offers travellers from Italy seamless onward connections via Delhi to destinations across the Indian subcontinent and Southeast Asia.

For IndiGo, the Delhi-London route represents continued international expansion following recent launches to Denpasar (Bali), Krabi, Hanoi, Guangzhou, and Manchester. The airline has also announced direct flights to Athens starting January 2026.

"This new service is expected to support the growing demand for travel between the two cities for commerce, tourism, and visiting family and friends. IndiGo is committed to making international travel seamless and more accessible, while strengthening connectivity between India and key global destinations," said Pieter Elbers, Chief Executive Officer, IndiGo.

Ivan Bassato, Chief Aviation Officer at Aeroporti di Roma, noted that Air India's return "marks a strategically important development that reinforces expectations of continued growth in long-haul markets in 2026."