Mumbai: The Indian aviation sector, which has been on a relentless post-pandemic climb, hit a rare speed bump in March due to the ongoing conflict in West Asia. Domestic air passenger traffic contracted marginally by 0.87% compared to the same period last year.
According to the latest data released by the Directorate General of Civil Aviation (DGCA), Indian carriers ferried 1.44 crore travelers in March 2026. This was a slight dip from the 1.45 crore passengers recorded in March 2025, marking a rare month-on-month decline in what has otherwise been a high-growth era for the industry. Overall, annual growth for January to March also decreased to 1.23%, with 4.37 crore passengers.
The primary catalyst for this slowdown is the intensifying geopolitical friction in West Asia. While the conflict is geographically distant, its impact on the Indian domestic circuit has been twofold. On the one hand, rising aviation turbine fuel (ATF) prices have forced airlines to hike spot fares, while airspace closures and rerouted flights have strained the resources of major carriers.
Despite the overall dip in numbers, the competitive landscape remained fierce. IndiGo maintained its dominant lead with 63.3% market share, while the Air India Group held its second position at 26.5%, followed by Akasa Air, SpiceJet, Star Air, Alliance Air and Fly91.
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The Passenger Load Factor (PLF) – a measure of how many seats an airline fills – saw a slight cooling across the board in comparison to last month. The airlines saw an average decrease of 5.4% of its load factor, with the highest fall recorded by Star Air from 79.1% in February to 69.7% in March and the lowest fall by IndiaOne Air, which saw 53% and 51.1% load factor in February and March, respectively. Akasa Air recorded the highest PLF in March at 90.5%, followed by IndiGo at 83.5%, SpiceJet at 82.8% and Air India Group at 82.3% load.
Aviation experts are labeling this a temporary correction rather than a long-term slump. Indian airlines recently signaled that without government intervention on ATF pricing and excise duties, the non-operatable conditions, created by the war, could lead to more significant capacity cuts in the coming quarter. As the industry moves into the busy summer vacation season, the focus shifts to whether the union government will use any policy measures to help the airlines maintain operational costs.
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