Aviation Sector Report : Air traffic declines 6% YoY in Sep'26 By Motilal Oswal Financial Services Ltd
* Domestic air passenger (PAX) traffic declined 6% YoY and 3% MoM to 12m in Sept’26. PAX growth stood at -5%/-2% for IndiGo, flat/-1% for Akasa, -9%/-2% for Air India, and -70%/-48% for SpiceJet on a YoY/MoM basis.
* Adjusted average domestic load factor (PLF) declined ~230bp YoY to 82% in Sept’26. PLF increased MoM for the AI/Indigo/Akasa Group by 290bp/190bp/50bp and declined ~110bp MoM for SpiceJet. Domestic airline on-time performance (OTP) stood at 71%, with IndiGo leading at 91.1%.
* IndiGo gained ~110bp market share YoY (increased ~30bp MoM) to 65.4% in Sept’26. In contrast, market share for the AI Group/SpiceJet declined ~70bp/130bp, while Akasa’s market share increased ~40bp on a YoY basis. On an MoM basis, AI/Akasa each witnessed ~10bp increase, while SpiceJet witnessed ~50bp decline. Market share for AI/SpiceJet/Akasa stood at 26.8%/0.6%/5.6%.
India's domestic air PAX and market share
* India's domestic air PAX declined 6% YoY and 3% MoM to 12m in Sep’26. Domestic PAX stood at 7.7m for IndiGo (down 5% YoY/2% MoM), 3.2m for the AI Group (down 9% YoY/2% MoM), 0.7m for Akasa (flat YoY/down 1% MoM), and 0.1m for SpiceJet (down 70% YoY/48% MoM).
* IndiGo’s domestic market share expanded ~110bp YoY/30bp MoM to 65.4%. Domestic market share for: i) AI Group – 26.8% (down 70bp YoY/up 10bp MoM), ii) Akasa – 5.6% (up 40bp YoY/10bp MoM), and iii) SpiceJet – 0.6% (down 130bp YoY/50bp MoM).
Domestic industry’s PLF and OTP
* Adj. domestic PLF stood at 82% in Sept'26 (80.9% in Aug’26 and 84.3% in Sept’25). PLF was 81.1% for IndiGo (Up 190bp MoM), 79.9% for the AI Group (down 290bp MoM), 88.1% for Akasa (up 50bp MoM), and 78.8% for SpiceJet (down 110bp MoM).
* The average OTP for domestic airlines across the top 10 airports stood at 71%. OTP stood at 91.1% for IndiGo, 81.7% for the AI Group, 90.8% for Akasa, and 16.6% for SpiceJet. According to the DGCA report, 65% of the delays were classified as ‘reactionary’, i.e. a delay caused by the late arrival of an aircraft or crew.
Other highlights
* Brent crude oil prices averaged USD102/bbl in Sept’26 vs. USD88/bbl in Aug’26. Stalled US-Iran talks, a record spike in Hormuz shipping attacks, and Houthi strikes on Saudi infrastructure kept the geopolitical risk premium elevated.
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