Despite passenger growth of 14.5pc in Jan25 (YoY), aviation industry likely to post loss in FY25, FY26: ICRA
Indian aviation industry is expected to report a net loss of Rs 2,000-3,000 crore in both FY25 and FY26, according to a report by ICRA. This comes after the sector posted a net profit of approximately Rs 1,600 crore in FY24.
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The losses are primarily attributed to pressure on ticket prices as airlines aim to maintain healthy passenger load factors (PLF) despite high aviation turbine fuel (ATF) prices. The industry is also expected to see a slow recovery in earnings due to its high fixed costs.
ICRA said «the Indian aviation industry to report a net loss of Rs. 20-30 billion in FY2025 and FY2026 compared to a net profit of ~Rs. 16 billion in FY2024 due to anticipated pressure on yields»
Another major challenge for airlines is rising borrowing costs. ICRA stated that the scheduled delivery of new aircraft will increase lease liabilities, adding to the interest burden.
However, the projected losses for the coming years are much lower than the Rs 23,500 crore and Rs 17,400 crore losses recorded in FY22 and FY23, respectively.
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