India's aviation sector achieved a historic milestone in FY26 by posting a collective net profit for the first time in a decade, with IndiGo, Air India, SpiceJet and Air India Express together earning a combined net profit of approximately Rs 3,200 crore. The industry's return to profitability was driven by aviation turbine fuel prices falling to their lowest levels since 2020, strong passenger demand with average load factors above 88%, and significant improvements in operational efficiency.
IndiGo, which commands a 63% domestic market share, drove the industry's profitability with a net profit of Rs 5,800 crore for FY26 — its highest ever. The airline benefited from its large fleet of fuel-efficient A320neo and A321XLR aircraft, effective cost management and strong revenue management systems that optimised yield across domestic and international routes. SpiceJet, which had been on the verge of insolvency in 2024, returned to operational profit for the first time in four years.
The positive FY26 outcome sets the stage for significant capacity expansion in FY27, with Indian carriers planning to add over 180 aircraft to the collective fleet. India's domestic air traffic is expected to cross 200 million passengers in FY27, up from 166 million in FY26, as new airports come online in tier-2 and tier-3 cities and growing middle-class incomes support mode shift from trains and buses to air travel for medium-distance journeys.
