West Asia disruptions, high fuel costs weigh on Indian aviation sector recovery: Report
New Delhi, June 3
Geopolitical tensions and disruptions arising from the ongoing West Asia crisis continue to weigh on the recovery of India's aviation sector, impacting traffic, capacity deployment and overall industry profitability, a report showed on Wednesday.
International passenger traffic of Indian carriers remained under pressure in April 2026 at around 1.8 million passengers, down 39 per cent year-on-year and 1 per cent month-on-month.
Revenue Passenger Kilometres (RPKs) declined around 33 per cent year-on-year to 7.2 billion, while flight departures were down around 37 per cent year-on-year despite a marginal sequential recovery, according to the latest 'Aviation Tracker' report by Equirus Securities.
The report noted that capacity rationalisation persisted, with Available Seat Kilometres (ASKs) down around 28 per cent year-on-year.
However, demand weakness outpaced capacity cuts, leading to a sharp decline in passenger load factor (PLF) to around 75.5 per cent, down 617 basis points year-on-year and 735 basis points month-on-month.
"The data indicates that the adverse impact of the West Asia conflict continued through April, affecting both traffic volumes and network efficiency," the report said.
Fuel costs remained elevated despite a sequential moderation. Brent crude stood at around $92 per barrel, up 44 per cent year-on-year, while Singapore jet fuel stood at around $128 per barrel, up 65 per cent year-on-year, said the report.
The rupee depreciation remained significant at around 95 against the US dollar, up 11 per cent year-on-year, increasing dollar-linked costs such as aircraft leases and maintenance expenses.
Moreover, domestic aviation turbine fuel (ATF) prices stood at around Rs 105.6 thousand per kilolitre, up 18 per cent year-on-year and 9 per cent month-on-month.
According to the report, government intervention continued to limit pass-through of global fuel inflation.
On the domestic front, passenger traffic declined to around 13.9 million passengers, down 3 per cent year-on-year and 4 per cent month-on-month. Capacity additions continued, with ASKs increasing around 3 per cent year-on-year, resulting in lower utilisation.
The West Asia crisis remains a key overhang for the aviation sector.
While airlines have undertaken capacity adjustments and route rationalisation measures, international operations continue to face pressure from disrupted travel patterns and lower demand, delaying a broader recovery in the segment, said the report.
— IANS
Reader Comments
As someone who travels frequently between India and the US for work, I’ve noticed the ticket prices have skyrocketed. The West Asia situation is making routes longer and more expensive. It’s not just airlines suffering; passengers like us are paying the price too.
The fall in passenger load factor to 75% is a red flag. Airlines are adding capacity but demand is dropping—that’s a recipe for losses. Maybe the government should reconsider its policy of limiting fuel price pass-through; it’s hurting airline margins. India’s aviation sector needs long-term stability, not short-term fixes.
I’m just glad we have some airlines still operating despite these challenges. But honestly, the government should have a contingency plan for such geopolitical disruptions. Relying too much on West Asian routes is risky. Time to explore more direct connections with Southeast Asia or Africa? 🇮🇳✈️
Interesting report. The 39% drop in international traffic is huge. I wonder how much is due to the conflict vs. other factors like visa issues or economic slowdown. Either way, airlines need to innovate—maybe more cargo revenue or partnerships can help offset losses.
The rupee depreciation is the silent killer here. At ₹95 to the dollar, everything from aircraft leases to spare parts becomes expensive. This is not just an airline problem—it’s a macroeconomic issue. Hope the RBI and government work together to stabilize the currency. 🙏
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