Domestic air passenger traffic fell 5% year-on-year to 1.20 crore in July, weighed down by high airfares and seasonal slowdown after reaching a 15.39-million peak in May, according to the latest DGCA data. The decline reflects weakening demand in India's aviation sector during the summer months, with the July figures representing a significant drop from the previous month's peak performance. As per Business Standard, the traffic decline was attributed to high airfares and seasonal slowdown following the May peak, with the 15.39-million peak in May having marked a significant milestone in domestic aviation traffic. The passengers carried by domestic airlines during January-July 2026 increased to 984.03 lakh against 977.79 lakh a year ago, thereby registering an annual growth of 0.64%, according to DGCA data, marking the slowest pace in five years.
Average airfares across 72 domestic sectors rose about 20.5% between March 2025 and June 2026, according to DGCA data cited by the civil aviation ministry in a written reply to the Rajya Sabha on 27 July. Average ticket prices are now hovering in the ₹7,000-7,500-odd range, compared with ₹5,000-5,500 a year earlier, as reported by Mint. Analysts have estimated a sharper increase of around 35%, though estimates are not directly comparable. The passenger load factor (PLF) rose from 70.5% in July 2022 and 77.7% in July 2023 to the mid-80s, reaching 85.7% in July 2025 and 85.3% this year, with nearly 85 of every 100 seats occupied despite July being a seasonally weak month for air travel due to monsoon conditions. Aloke Bajpai, chairman of Le Travenues Technology Ltd (ixigo), reported that average transaction value increased 22% year-on-year domestically and 38% internationally during April-June, driven by higher ticket prices rather than customer volumes.
All major Indian airlines experienced passenger volume declines in July, with IndiGo carrying 80.82 lakh passengers against 89.20 lakh in June, while Air India group flew 28.75 lakh passengers compared to 32.22 lakh in June 2026, according to DGCA data. Akasa Air transported 6.65 lakh passengers in July versus 8.61 lakh in June, and SpiceJet carried 1.87 lakh passengers against 2.63 lakh in June. Despite the volume decline, IndiGo raised its market share to 67.4% from 66.3%, while Air India group market share rose marginally to 24% from 23.9% in June. However, Akasa and SpiceJet saw their market share falling to 5.5% (from 6.4%) and 1.6% (from 1.9%) respectively. July departures fell 38% at SpiceJet, 19% at Air India, 18% at Air India Express, 7% at Akasa Air and 3% at IndiGo from a year earlier, with domestic departures in July falling to 82,258 from 89,217 in July 2025 and 92,066 in July 2024.
The traffic decline was attributed to high airfares and seasonal slowdown following the May peak, as reported by Business Standard. The 15.39-million peak in May had marked a significant milestone in domestic aviation traffic, but the subsequent 5% year-on-year drop to 1.20 crore in July indicates a cooling of passenger demand in the Indian air travel market. Airlines have cited operational constraints, higher jet fuel prices and longer flying hours because of airspace restrictions over Pakistan and continued turmoil in West Asia among other factors for capacity adjustments. Gagan Dixit from Elara Securities noted that airlines have cut capacity sharper than fall in demand, with 15-day advance booking trends showing ticket prices up at least 35% over recent months. The capacity pullback is more than a one-month shift, with domestic departures falling nearly 11% below the 2024 peak and 8% below a year earlier—almost 10,000 fewer flights than in 2024.
Airline stocks showed mixed performance on Friday, August 21, following the DGCA's July traffic data release. IndiGo operator InterGlobe Aviation declined over 2% to its intraday low of ₹5,071 on Friday, opening at ₹5,155 and trading at ₹5,062.5 per share on NSE. SpiceJet shares jumped 2% to today's high of ₹11.10 after opening at ₹10.89, with the stock trading 1.38% higher at ₹11.04 per share at 1:17 PM. Since the beginning of 2026, IndiGo's shares have declined over 1% with a market capitalisation of ₹1.96 lakh crore, while SpiceJet, with a market capitalisation of ₹1,681.76 crore, has tanked 63% since the beginning of 2026. The capacity cuts are creating challenges for online travel agencies, with Aloke Bajpai from ixigo noting that Air India has seen close to 20% cut while IndiGo has seen a 10% cut, potentially limiting booking availability despite higher fare values.
In on-time performance, IndiGo had the highest percentage of its flights (91.2%) departing and arriving on time, followed by Akasa Air (90.8%) to and from 10 domestic airports—Bengaluru, Delhi, Hyderabad, Mumbai, Chennai, Kolkata, Ahmedabad, Cochin, Guwahati and Lucknow—during the previous month, according to the aviation safety regulator. This operational excellence comes despite the challenging traffic environment and reflects the airlines' focus on service quality and punctuality in the competitive aviation market. The government pointed to aviation turbine fuel (ATF), foreign exchange rates, excise duty, VAT and lease rentals as factors affecting airline costs, with ATF alone accounting for 35-40% of airline operating costs.
