India’s domestic air traffic fell 8.3% year-on-year in September 2026, recording the steepest decline among major domestic aviation markets, according to the International Air Transport Association (IATA). The drop was also India’s sharpest monthly decline so far this year.
IATA attributed the pressure on demand to higher fuel prices and softer economic conditions. The decline came as airlines reduced capacity, reflecting a difficult period for the domestic aviation market.
Airlines Cut Capacity as Demand Weakens
Domestic capacity in India contracted 7.9% in September compared with the same month last year. The passenger load factor—the share of available seats filled—fell by 0.3 percentage points to 81%.
The figures suggest airlines were adjusting schedules and seat availability as demand weakened. The passenger load factor remained relatively high, but the year-on-year decline indicates that the capacity cuts did not fully offset the fall in traffic.
India Underperforms Other Major Markets
India recorded the weakest domestic traffic performance among the major markets tracked by IATA. Worldwide, domestic air traffic fell 2.2% year-on-year in September, with declines in India, the United States and Japan outweighing growth in Australia, China and Brazil.
Across the global aviation industry, passenger traffic declined 0.5% in September, a modest improvement from the 0.8% drop recorded in August. International traffic returned to growth, rising 0.4% year-on-year.
Industry Outlook Remains Uneven
IATA said global scheduled seat capacity is expected to remain above 2025 levels in October and November, although growth is likely to remain weak and uneven across regions.
For Indian airlines, the September figures underline the challenge of balancing demand, fares and operating costs. Higher fuel prices can put pressure on airline finances, while increasing ticket prices may make travel less affordable for passengers.
The latest data points to continued strain on India’s domestic aviation market, even as global passenger traffic shows early signs of stabilising.
