India's aviation recovery slowed by high fuel costs and West Asia conflict

Geopolitical tensions stemming from the ongoing West Asia crisis continue to weigh on the recovery of India's aviation sector, curbing traffic, capacity deployment and overall profitability. International passenger traffic in April 2026 fell 39% year‑on‑year to about 1.8 million, with revenue passenger kilometres down 33% YoY to 7.2 billion and flight departures down 37% YoY. Capacity rationalisation persisted, with available seat kilometres down roughly 28% YoY, while passenger load factor slipped to around 75.5% (a drop of 617 basis points YoY and 735 basis points month‑on‑month).

Fuel costs remained elevated: Brent crude averaged $92 per barrel, up 44% YoY, and Singapore jet fuel was about $128 per barrel, up 65% YoY. The rupee weakened to around 95 per US dollar, an 11% YoY depreciation, raising dollar‑linked expenses such as aircraft leases and maintenance. Domestic aviation turbine fuel prices rose to roughly Rs 105.6 thousand per kilolitre, up 18% YoY and 9% month‑on‑month. Government intervention has limited the pass‑through of global fuel inflation.

Domestically, passenger traffic declined to about 13.9 million, down 3% YoY and 4% month‑on‑month, while capacity additions saw ASKs rise around 3% YoY, further lowering utilisation. The West Asia crisis remains a key overhang, with airlines adjusting capacity and routes but international operations still facing disrupted travel patterns and reduced demand, delaying a broader sector recovery.