India's Domestic Air Travel Hits Worst Patch in 2026 as Passenger Traffic Drops 8.3%

India’s aviation sector faced another sign of slowing demand in September, with domestic air passenger traffic recording its steepest decline so far in 2026. Higher fuel prices and weaker economic conditions continued to weigh on the market, making India the worst-performing among the world’s major domestic aviation markets.

According to the International Air Transport Association (IATA), India’s domestic air traffic fell 8.3 per cent year-on-year (YoY) in September. The decline was the sharpest recorded by the country this year and stood in contrast to growth in several other major aviation markets.

Among Indian airlines, SpiceJet recorded the steepest passenger traffic decline, while IndiGo also reported a year-on-year fall of around 5 per cent. Despite the drop, IndiGo retained its position as India’s largest domestic airline, with a 65.4 per cent market share.

The drop in overall traffic came alongside a reduction in airline capacity. Available capacity in India contracted by 7.9 per cent, while the Passenger Load Factor (PLF), which measures how much of an airline’s available seating capacity is occupied, slipped by 0.3 percentage points to 81 per cent.

IATA attributed the weakness in India’s aviation market to a combination of higher aviation fuel prices and softer macroeconomic conditions, which have kept passenger demand under pressure.

The slowdown was also reflected in global aviation figures. Worldwide, industry-wide Revenue Passenger Kilometres (RPK) declined by 0.5 per cent in September compared with the same month last year. RPK measures passenger traffic by accounting for the number of passengers carried and the distance travelled.

The global decline was slightly smaller than the 0.8 per cent contraction recorded in August. Across major domestic markets, traffic fell by 2.2 per cent overall, with declines in India, the United States and Japan outweighing growth in Australia, China and Brazil.