India's Air Passenger Traffic Grows to 202 Million in H1FY26: Growth Projections and Industry Outlook

India's aviation sector has demonstrated resilience with total air passenger traffic expanding by 2.6 percent year-on-year to reach 202 million in the first half of FY26, compared to 197 million in the same period last year, according to a report released Wednesday by CareEdge Ratings.

The report highlights that domestic air travel in India increased by 1.6 percent, while international traffic showed stronger growth at 6.9 percent during this period.

CareEdge Ratings has adjusted its forecast for India's total passenger traffic in FY26 to 430 million, down from its earlier projection of 445 million passengers.

The analysis indicates that the 11 airports assessed are expected to experience healthy operating income, translating to an aggregate year-on-year growth in profit before interest, taxes, depreciation, and amortisation (PBILDT) exceeding 40 percent.

For the complete fiscal year, domestic passenger traffic is predicted to grow by 3.5 percent, while international traffic is anticipated to increase by approximately 8 percent. The latter half of FY26 is expected to benefit from the festive season and the opening of two new greenfield airports, which should alleviate supply constraints and stimulate traffic growth.

Palak Vyas, Associate Director at CareEdge Ratings, explained the downward revision in growth projections: "Cross-border tensions in Q1 FY26, reduced aircraft availability due to fleet-wide inspections following the fatal aircraft accident in June 2025, and delays in wide-bodied aircraft deliveries have contributed to the revised outlook."

Vyas added, "Looking at the medium term, with passenger traffic expected to grow at a CAGR of 8-9 percent, the outlook for the airport sector remains favorable. However, timely delivery of wide-bodied aircraft will be a key factor to monitor for growth in international traffic."

The positive outlook is supported by ongoing airport and airline capacity expansions, coupled with strong air travel demand driven by favorable demographics and India's expanding middle-class population.

The financial risk profile of airport operators is projected to remain robust, with aggregate aeronautical revenue for the 11 airports evaluated expected to increase by 50 percent year-on-year.