New Delhi, Feb. 24 -- The Indian aviation industry is projected to see its net losses decline by one-third in the 2026-27 fiscal year as domestic passenger traffic growth recovers to an estimated 6-8 per cent.

The industry's net loss is projected to reduce to Rs 110-120 billion in 2026-27 from an elevated Rs 170-180 billion in the current 2025-26 fiscal year. While the 2025-26 losses are significantly higher than the Rs 55 billion loss reported in 2024-25, the anticipated improvement is driven by the normalisation of flight operations and a steady rise in passenger demand.

According to rating agency ICRA, domestic air passenger traffic is expected to touch between 175 million and 179 million during this period. This recovery follows a p...