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Domestic air traffic slowed in Apr-26, partly impacted by higher airfares amid the ongoing geopolitical volatility, though daily trends in May-26 indicate a stronger recovery supported by seasonal travel demand. Operational metrics weakened in Apr-26, with PLFs and OTP declining sequentially, while cancellations continued to inch up. On the cost front, OMCs reduced international ATF prices sharply by 27% while keeping domestic ATF prices unchanged for Jun-26, thereby providing nearterm respite to airlines.

Domestic pax growth softens in Apr; strong rebound seen in May

India’s domestic passenger air traffic declined 3% YoY to 13.8mn in Apr-26, likely impacted by uptick in airfares following the introduction of fuel surcharge by airlines. However, daily trends in May-26 indicate a stronger rebound, with ~11% YoY growth, supported by seasonal travel demand. Indigo continued to strengthen its dominant position in the domestic space, expanding its market share by 170bps MoM to 65.0%. Also, Akasa recorded a 40bps MoM uptick, with record market share at 5.8%. However, the Air India Group’s market share declined by 150bps MoM to 24.7%, while SpiceJet recorded a 40bps MoM downtick to 3.4%.

Operational metrics weaken with lower PLFs and OTP, higher cancellations

The passenger load factor (PLF) plummeted across key airlines in Apr-26, with the Air India Group reporting the highest monthly downtick of 3.8%, resulting in Apr-26 PLF of 78.5%. SpiceJet and Indigo followed, reporting MoM decline of 2.1% and 0.8%, with PLF down to 80.7% and 82.7%, respectively. However, Akasa reported a 1.3% MoM uptick, with PLF improving to 91.8%. On-time performance (OTP) declined sequentially across key airlines in Apr-26, except for the Air India Group, with OTP improving to 82.4% from 78.0% in Mar26. Indigo remained the most punctual, with an OTP of 88.5%, while SpiceJet reported the lowest OTP, declining to 31.2% from 43.0% MoM. Akasa’s OTP declined to 81.4% from 82.6% MoM. Cancellations further aggravated during the month, with Indigo’s cancellation rate increasing to 0.39% from 0.27% in Mar-26. SpiceJet recorded the highest cancellation rate, at 2.67%, while the Air India Group stood at 0.82%. Akasa recorded the lowest cancellation rate, of 0.17%.

International ATF prices decline sharply, nearing domestic levels

Providing significant relief to airlines on stressed international operations, PSU OMCs have reduced Jun-26 ATF prices for international operations by a steep 27% to USD1.1/ltr, driven by softening crude oil prices and jet fuel cracks. Consequently, international ATF prices are now largely at par with domestic scheduled operations. Further, despite continuing underrecoveries, OMCs have kept ATF prices for domestic scheduled operations unchanged for the second consecutive month, at Rs104.9/ltr (in Delhi). However, the reduction in VAT rates by Maharashtra and Delhi—from 18% and 24% to 7%, respectively—has partially alleviated under-recoveries for OMCs, with the two states accounting for ~45% of aviation traffic from a fueling perspective.

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