Airlines take off on summer tailwinds as May traffic rebounds

India's domestic aviation market rebounded in May as the summer holiday season and a favourable base lifted demand after three months of subdued growth.

Domestic passenger traffic rose 9.5% year-on-year to 15.39 million, while traffic was up 12% over April, according to data released by the Directorate General of Civil Aviation (DGCA) on Tuesday. Airlines carried 14.06 million passengers in May 2025.

Passenger traffic in May 2025 had been hit by travel disruptions and weaker demand following Operation Sindoor and heightened India-Pakistan tensions, creating a favourable base for this year's growth.

The recovery in May follows at least three months of softness. After remaining flat in February, passenger growth dipped year-on-year in March and April.

Domestic air traffic grew just 1.91% to 72.94 million passengers during January-May, from 71.57 million a year earlier. This marks a sharp slowdown from the more than 8% growth recorded during the same period in 2025.

Base effect

Experts attributed the May rebound to the favourable base. “May demand is generally stronger than April because of holiday travel,” said Gagan Dixit, senior vice president, oil & gas and aviation at brokerage firm, Elara Securities. “However, the year-on-year growth in May is [due to the] base effect. Last year, Operation Sindoor significantly impacted travel sentiment in May,” he added.

Jainam Shah, an aviation analyst at Equirus Securities, agreed. “May last year was significantly impacted by the Pahalgam terror attack (followed by Operation Sindoor), which disrupted travel demand,” he said. “We expect domestic passenger growth to moderate to low-to-mid single digits in June.”

Shah said domestic demand remains largely stable, with passenger growth continuing to outpace capacity growth, resulting in healthy passenger load factors. “Airlines have been selectively rationalising capacity to protect profitability amid higher fuel costs, while recent fuel surcharges have tempered demand from price-sensitive travellers,” he said.

IndiGo surges, SpiceJet recedes

Of the country's five largest airlines, Air India and SpiceJet reduced capacity during the month, while IndiGo, Air India Express and Akasa Air expanded operations, according to data from DGCA.

Air India operated 15,510 departures in May, about 500 fewer than a year earlier, while its low-cost subsidiary Air India Express increased departures 5% to 11,616. As a result, the Tata Group's combined domestic departures came in around 27,100, broadly unchanged from last year, despite the full-service carrier's previously announced capacity cuts. Air India has been trimming domestic and international operations following fleet and operational challenges. The airline is expected to report record losses of nearly $3 billion (about ₹26,000 crore), forcing route rationalisation as part of a broader restructuring aimed at stemming cash burn.

The group's domestic market share stood at 25.6% in May, recovering from 24.7% in April but remaining below the 26.5% recorded a year earlier. “Air India Group's market share improved in May, primarily at the expense of SpiceJet rather than due to a broad-based market recovery,” Equirus’s Shah said.

Cash-strapped SpiceJet reduced capacity by about 7%, operating 2,660 departures, roughly 200 fewer than a year earlier. Its market share fell to 2.5%, and it recorded the highest cancellation rate among the five largest airlines at 4.04%—meaning roughly four out of every 100 scheduled SpiceJet flights were cancelled during the month.

Market leader IndiGo, operated by InterGlobe Aviation, retained its dominance with a 64.9% domestic market share, while increasing capacity by around 6% year-on-year to 62,993 departures.

Akasa Air continued to expand rapidly, increasing departures by more than 19% year-on-year to 5,172, from 4,343 in May 2025. The airline retained a 5.8% market share, cementing its position as India's third-largest carrier.