Indian Aviation Traffic Growth To Slow To 1-3% In FY27 Amid Fuel Price, Geopolitical Pressures: ICRA
Mumbai: India’s civil aviation sector is set to face a protracted period of sluggish growth as escalating geopolitical volatility in West Asia, persistent supply chain bottlenecks and stubborn fuel prices continue to weigh on air travel. According to new projections from credit rating agency ICRA, total air passenger traffic at Indian airports is expected to grow by a modest 1% to 3% in the…
India's civil aviation sector is poised for a slowdown in growth, with passenger traffic forecast to expand by a modest 1% to 3% in the fiscal year 2026-27, according to ICRA. The modest growth is anticipated to reach between 424 million and 432 million passengers. The slowdown is primarily attributed to the ongoing West Asian crisis, geopolitical tensions, persistent supply chain issues, and stubbornly high fuel prices.
International travel experienced a sharp decline in March 2026, with a 20% drop in year-on-year air passenger volumes, while domestic movements remain constrained by the crisis and weak global economic conditions. Despite the challenges, airport operators display resilience, with projected revenue growth of 6% to 8% in FY2027, driven by tariff revisions and strong non-aeronautical revenue streams.
Infrastructure investments are expected to continue unabated, with capital expenditure projected to surpass Rs 1 lakh crore over the next four to five years.
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