India’s aviation sector is facing a difficult phase after years of rapid expansion, with safety concerns, financial losses and rising operating costs putting pressure on airlines even as the long-term demand for air travel remains strong.
The industry has expanded dramatically. Indian airlines carried about 167 million passengers last year, more than twice the level recorded a decade earlier. More than 70 airports have been added over the past decade, while airlines have placed orders for around 1,500 aircraft. But the rapid expansion has also exposed gaps in infrastructure, skilled manpower, aircraft maintenance and regulatory oversight.
The latest concerns have put aviation safety firmly back at the centre of the industry’s growth story.
A fatal training aircraft crash in Kanpur on August 27 has intensified scrutiny of India’s pilot-training ecosystem. A Tecnam P2006T aircraft operated by Garg Aviation crashed near the Ganga Barrage, killing a trainee pilot and a flight instructor. The Aircraft Accident Investigation Bureau is probing the accident.
The crash has attracted additional attention because the Directorate General of Civil Aviation (DGCA) had raised concerns about Tecnam aircraft before the accident. Safety recommendations had been circulated to flying training organisations, including measures relating to the operation of the aircraft. The latest development has raised questions about how effectively regulatory warnings are implemented on the ground.
The concerns extend beyond flying schools. India’s major airlines have also faced operational and safety challenges.
Air India remains under close scrutiny following the fatal Boeing 787 crash in Ahmedabad last year. The accident, which killed 260 people, triggered investigations into aircraft systems, operating procedures and safety practices. The final investigation is expected to remain a significant issue for the airline and the wider aviation industry.
An audit of Air India has also identified around 100 safety lapses, with seven requiring urgent corrective action. The findings have increased pressure on the airline as it attempts to rebuild its operations and establish itself as a stronger global carrier.
Air India is simultaneously undertaking an expensive transformation under the Tata Group. The airline is modernising its fleet, refurbishing existing aircraft and expanding its international network. It has also continued taking deliveries of new aircraft, including another Boeing 787-9 Dreamliner this week.
The financial burden of that transformation is significant. Air India’s losses more than doubled to about $2.3 billion in the financial year ended March 2026. The airline is therefore attempting to balance large capital requirements with the need to improve operational performance and profitability.
IndiGo, meanwhile, has also faced pressure despite its dominant position in the domestic market. The airline experienced major operational disruption earlier in the year, while higher costs and changing market conditions have affected profitability. It has also shut down its wide-body operations, highlighting the difficulties involved in expanding into longer international routes.
The financial strain is being felt across the sector. Indian airlines are dealing with higher fuel costs, longer international routes and expensive fleet expansion. Geopolitical tensions have pushed up oil prices, while restrictions on Pakistani airspace have forced some Indian carriers to take longer routes, adding to fuel consumption and operating expenses.
This creates a difficult equation for airlines. They need to invest heavily in aircraft and infrastructure to capture India’s growing demand, but higher costs can make those investments harder to support through ticket revenue.
Passenger growth itself has also moderated in recent months. Domestic airlines carried around 12 million passengers in July, a decline of 4.8% from a year earlier. Despite the monthly fall, passenger traffic during the first seven months of the year remained slightly ahead of the corresponding period last year, indicating that demand has not disappeared.
The bigger concern is whether the aviation ecosystem can keep pace with future growth.
Airlines are ordering aircraft at an unprecedented rate, creating demand for pilots, engineers, cabin crew, maintenance facilities and airport infrastructure. Regulators also need adequate technical manpower to monitor increasingly large and complex fleets.
The concentration of the market adds another layer of risk. IndiGo and Air India together account for the overwhelming majority of India’s domestic airline capacity. That gives the two carriers enormous scale but also means that operational problems at either airline can have a wider impact on passengers and the broader aviation network.
India continues to invest in airports and connectivity. New facilities are coming online while existing airports are being expanded. However, building airport capacity alone will not be enough. The industry needs a coordinated expansion of air traffic management, maintenance infrastructure, pilot training and safety supervision.
The government and aviation regulator focus on shifting from simply promoting growth to managing it sustainably.
India still has one of the world’s most promising aviation markets. Rising incomes, increased air connectivity and greater international travel should support long-term passenger growth. But recent events show that rapid expansion carries risks when supporting systems fail to keep pace.
The next phase of India’s aviation story will depend on whether airlines can strengthen their balance sheets while maintaining safety standards, and whether regulators can ensure that growth does not come at the expense of operational discipline.