India Aviation Growth Set to Stagnate at 0-3% in FY26

India's domestic air passenger traffic is projected to grow by only 0-3% in the fiscal year 2025-26, marking the slowest expansion since the pandemic era. This muted growth comes despite underlying strong travel demand, as the sector grapples with significant capacity constraints. Key factors weighing on traffic include widespread aircraft groundings, intensive safety inspections following the Air India crash, and substantial flight reductions by major carrier IndiGo. Geopolitical disruptions have further compounded the operational challenges. Industry analysts note that while consumer demand remains robust, the available seat capacity has been severely curtailed by these concurrent operational and regulatory pressures.