Indian aviation outlook resilient despite fuel, currency headwinds: Equirus
New Delhi, August 3
India's aviation sector is likely to remain resilient in the near term, supported by healthy domestic passenger load factors and a sequential recovery in international traffic, although elevated fuel prices and a weaker rupee could continue to weigh on airline profitability, brokerage Equirus said in its latest research report.
The brokerage expects cost pressures to remain a key monitorable, given the sharp rise in global aviation fuel prices and dollar-denominated expenses.
Equirus noted that global aviation fuel prices surged materially in July amid geopolitical tensions, with Brent crude averaging around $87.3 per barrel, up 20 per cent both year-on-year and month-on-month. Singapore jet fuel prices rose to around $155 per barrel, up 71 per cent YoY and 37 per cent MoM. At the same time, the rupee weakened to around ₹95.4 per dollar, increasing pressure on expenses such as aircraft leases, maintenance and other operating costs.
Despite seasonal moderation, Equirus said domestic demand remained resilient relative to capacity. Domestic passenger traffic stood at around 13.5 million in June 2026, down 1 per cent YoY and 12 per cent MoM, while RPKs were broadly flat YoY. Capacity declined 2 per cent YoY and 13 per cent MoM, helping the domestic passenger load factor remain healthy at 85.7 per cent, up 118 basis points YoY.
On international aviation, Equirus highlighted continued sequential recovery following an easing in the West Asia conflict. Passenger traffic of Indian carriers rose 4 per cent MoM to around 2.4 million, while departures increased 6 per cent. However, traffic remained 15 per cent below year-ago levels and the international PLF moderated to 76.1 per cent, suggesting that demand recovery continues to lag capacity.
The brokerage also pointed to a further shift in market share towards IndiGo and Akasa Air. IndiGo's domestic passenger share rose to 66.1 per cent, while Air India Group's declined to 24.1 per cent. In international markets, IndiGo strengthened its leadership with a 54 per cent passenger share, compared with 40.8 per cent for Air India Group.
Equirus said operational performance also improved, with IndiGo's on-time performance at 89.4 per cent and Air India Group's improving sharply to 85.9 per cent.
— ANI
Reader Comments
IndiGo at 66% domestic share is absolutely massive! They're basically running the show now. And their international growth to 54% share is impressive. At this rate, Akasa and Air India need to step up their game soon. ✈️
The domestic load factor at 85.7% shows Indians are still flying despite high prices. But the international traffic being 15% below last year's levels is worrying - the West Asia conflict has really hurt our connectivity to that region. Middle-class families who usually fly to Dubai or Gulf for work are definitely thinking twice now.
Finally some good news about on-time performance! Air India improving to 85.9% is a big deal - they used to be notorious for delays. But honestly, fuel prices at $155 per barrel for jet fuel is crazy high. Airlines need to manage costs better or fares will go through the roof. 😤
As someone who flies to India frequently for business, I'm impressed by the resilience of Indian carriers. The infrastructure improvement and on-time performance are getting much better. But the rupee depreciation is making international travel to India more expensive - hope this doesn't slow down business travel.
The real issue here is that while aviation is "resilient", the common man is struggling. Airfares are up, rupee is down, and the government keeps talking about growth but not addressing inflation. Airlines are filling seats but at what cost to passengers? We need better regulation on fare pricing.
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