The year 2025 emerged as one of the most challenging periods for Indian aviation, not due to a single catastrophic event, but because multiple crises simultaneously exposed critical vulnerabilities across the industry. From fatal accidents to unprecedented operational breakdowns, the year tested the resilience of India's rapidly expanding aviation sector while revealing uncomfortable truths about operational preparedness and safety oversight.

Tragic Air India Crash Sets Somber Tone

The most devastating event of 2025 occurred on June 12, when Air India flight AI171 crashed seconds after takeoff from Ahmedabad airport. The accident resulted in significant casualties and placed the airline under intense regulatory scrutiny.

The preliminary investigation revealed that fuel control switches moved from 'run' to 'cut-off' position, leading to a complete loss of engine thrust. However, investigators have not yet determined whether this switch movement resulted from technical malfunction or pilot action. The final investigation report remains pending, leaving critical questions unanswered six months after the tragedy.

IndiGo's Unprecedented Operational Breakdown

December brought another major crisis when IndiGo, India's largest airline, experienced widespread flight disruptions that shook passenger confidence across the industry. The operational breakdown, particularly severe at Delhi airport, represented an unprecedented scale of service failure for the typically reliable carrier.

IndiGo later admitted to aviation regulators that it had misjudged pilot requirements following the implementation of new crew rest regulations on November 1. Pilot associations alleged the airline was aware of these requirements but delayed hiring additional crew members. The severity of the situation prompted DGCA to summon IndiGo's senior leadership, who subsequently appeared before a parliamentary panel to explain the operational failures.

Geopolitical Challenges and Airspace Restrictions

Operational difficulties were compounded by geopolitical developments that highlighted the industry's vulnerability to external factors beyond airline control. On May 7, India launched Operation Sindoor, targeting terror infrastructure across the Line of Control, which necessitated temporary airport closures across multiple states.

The security measures resulted in:

• Temporary shutdown of airports in Jammu & Kashmir, Punjab, Rajasthan, Gujarat, and Himachal Pradesh
• Thousands of stranded passengers due to flight cancellations and diversions
• Increased operational costs for long-haul flights, particularly Air India's European and North American routes
• Extended flight times and higher fuel consumption due to longer routing requirements

Pakistan's continued airspace closure added structural pressure on Indian airlines, forcing them to adopt less efficient flight paths and increasing operational complexity.

Positive Developments Amid Challenges

Despite the operational difficulties, 2025 also witnessed significant positive developments that reinforced global confidence in India's aviation sector. In early June, India hosted the International Air Transport Association's 81st Annual General Meeting in New Delhi, marking the first time in 42 years that this prestigious global aviation gathering returned to the country.

The selection of India as host venue reflected the country's growing importance in global aviation, driven by massive aircraft orders from Air India and IndiGo that have positioned India as one of the world's most critical aviation markets.

Infrastructure and Industrial Advancement

November brought significant industrial development when French engine manufacturer Safran opened its largest maintenance, repair, and overhaul (MRO) facility in Hyderabad. The company also laid the foundation stone for a Rafale engine MRO unit, positioning India as an emerging global hub for aircraft maintenance services.

The long-awaited Navi Mumbai International Airport began operations on December 25, addressing Mumbai's decades-old single-runway constraint. The new facility features dual parallel runways enabling simultaneous takeoffs and landings, modern terminals with digital passenger processing, and advanced baggage systems designed for scale and efficiency.

Industry Resilience Among Smaller Players

Despite sector-wide challenges, smaller airlines demonstrated resilience and gradual recovery. SpiceJet increased its operational fleet to 33 aircraft, representing its highest fleet size in recent years after enduring prolonged financial and operational stress. Akasa Air continued its cautious expansion, growing its fleet to 31 aircraft while maintaining operational stability.

These developments matter significantly in India's highly concentrated aviation market, where Air India and IndiGo together control nearly 70.00% of domestic market share, making survival and recovery for smaller carriers a critical test of industry resilience.

While 2025 may not rank as Indian aviation's darkest year historically, it proved to be arguably the most revealing year yet. The multiple crises exposed how thin operational margins have become in a high-growth environment and demonstrated the industry's vulnerability to security, weather, and geopolitical shocks. However, continued global confidence, backed by infrastructure development and industrial investment, suggests the sector's long-term growth trajectory remains intact despite short-term operational challenges.

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.