New Delhi [India], August 3 : India's aviation sector is likely to remain resilient in the near term, supported by healthy domestic passenger load factors and a sequential recovery in international traffic, although elevated fuel prices and a weaker rupee could continue to weigh on airline profitability, brokerage Equirus said in its latest research report.
The brokerage expects cost pressures to remain a key monitorable, given the sharp rise in global aviation fuel prices and dollar-denominated expenses.
Equirus noted that global aviation fuel prices surged materially in July amid geopolitical tensions, with Brent crude averaging around $87.3 per barrel, up 20 per cent both year-on-year and month-on-month. Singapore jet fuel prices rose to around $155 per barrel, up 71 per cent YoY and 37 per cent MoM. At the same time, the rupee weakened to around ₹95.4 per dollar, increasing pressure on expenses such as aircraft leases, maintenance and other operating costs.
Despite seasonal moderation, Equirus said domestic demand remained resilient relative to capacity. Domestic passenger traffic stood at around 13.5 million in June 2026, down 1 per cent YoY and 12 per cent MoM, while RPKs were broadly flat YoY. Capacity declined 2 per cent YoY and 13 per cent MoM, helping the domestic passenger load factor remain healthy at 85.7 per cent, up 118 basis points YoY.
On international aviation, Equirus highlighted continued sequential recovery following an easing in the West Asia conflict. Passenger traffic of Indian carriers rose 4 per cent MoM to around 2.4 million, while departures increased 6 per cent. However, traffic remained 15 per cent below year-ago levels and the international PLF moderated to 76.1 per cent, suggesting that demand recovery continues to lag capacity.
The brokerage also pointed to a further shift in market share towards IndiGo and Akasa Air. IndiGo's domestic passenger share rose to 66.1 per cent, while Air India Group's declined to 24.1 per cent. In international markets, IndiGo strengthened its leadership with a 54 per cent passenger share, compared with 40.8 per cent for Air India Group.
Equirus said operational performance also improved, with IndiGo's on-time performance at 89.4 per cent and Air India Group's improving sharply to 85.9 per cent.