New Delhi: India's domestic air passenger traffic grew 1.4 percent year-on-year to 1,677.4 lakh in FY26, in line with the Icra's estimate of 0-3 percent, the agency said on Tuesday.

All Indian airlines together had flown a total of 1,653.8 lakh passengers in FY25.

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For March this year, the domestic air passenger traffic rose 1 percent year-on-year to 146.8 lakh, ICRA said.

The airlines' capacity deployment in March 2026 was 3 percent lower than a year earlier, the agency said, adding that it is estimated that the domestic aviation industry operated at a passenger load factor of 89.5 percent in the reporting month compared to 86 percent in March 2025.

International passenger traffic for Indian carriers in February this year stood at 28.5 lakh, a decline of 0.3 percent year-on-year and a sequential fall of 16 percent. For the April-February period of the previous fiscal, it was seen at 331.5 lakh, a growth of 7.7 percent, Icra said.

Noting that the average aviation turbine fuel prices announced on April 1, 2026, increased by 9.2 percent on a sequential basis and by 18.2 percent on a year-on-year basis on account of the impact of the West Asian conflict, the ratings agency said that while crude oil prices rose sharply (by 45.5 percent month-on-month in March this year) due to the geopolitical crisis, the pass-through to ATF prices was moderated.

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Although the civil aviation ministry capped domestic ATF price increases at 25 percent sequentially, the oil marketing companies raised ATF prices by only 9.2 percent sequentially in April 2026 for domestic operations, tempering the immediate cost impact on the aviation sector.

Nonetheless, crude oil prices remain elevated, which can impact ATF prices in the future, it said, adding that the continuous weakening of the rupee against the US Dollar is another concern.

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