Should You Rethink That Ticket? Rising Airfares, Falling Market Share & Flight Performance Decoded

India’s domestic aviation sector saw muted growth in June 2025, with total passenger traffic rising just 3% year-on-year to 13.6 million, according to a report by Emkay. Early data for July indicates a reversal, with a 1% decline in passenger numbers compared to the same period last year.

While the sector grapples with slowing demand, Indigo and the Air India group continue to dominate India’s skies, accounting for a combined ~92% of domestic traffic.

Indigo, Air India Hold Their Ground, SpiceJet Slips
Indigo maintained its market-leading position, though its market share slipped marginally by 10 basis points month-on-month (MoM) to 64.5% in June 2025. In contrast, the Air India group — comprising Air India, AIX Connect (formerly AirAsia India), and Vistara — gained 60bps MoM to reach a 27.1% share.

SpiceJet, however, saw its market share decline further to just 1.9%, a 50bps MoM drop, marking its lowest point yet. Akasa Air held steady at 5.3%.
“SpiceJet is hitting new lows with its market share shrinking by 50bps MoM to 1.9%,” Emkay noted in its report.

Read More – Nifty Hits One-Month Low – What’s Dragging The Market?

Load Factors Rebound, But Punctuality Still a Mixed Bag
Passenger load factors (PLFs) recovered across most major carriers in June. The Air India group led the gains, with PLFs rising by 130bps to 81.5%. Indigo and SpiceJet followed with PLFs of 85.4% and 85.2%, respectively, while Akasa topped the chart with 91.4%.

On-time performance (OTP) saw mixed results. Indigo led with 86.3%, followed by Akasa at 82.9%. The Air India group’s OTP dipped to 76.6% from 79.7% MoM, while SpiceJet lagged far behind at 55.6%.

Cancellations improved sharply: Indigo’s dropped to 0.43% from 2.03%, and Akasa had the lowest rate at just 0.05%. However, SpiceJet again posted the worst figure at 3.27%, followed by the Air India group at 0.91%.

Rising Fuel Costs Could Squeeze Margins
A spike in global crude oil prices, driven by geopolitical tensions, led PSU oil marketing companies to hike aviation turbine fuel (ATF) prices by 8% MoM to ₹89.3 per litre (Delhi) in July.
Brent crude is hovering around USD 70 per barrel, signalling further price hikes. “We foresee a ~2% MoM uptick in ATF price for Aug-25, largely driven by a ~3% uptick in jet fuel cracks while crude oil prices were largely stable MoM,” Emkay highlighted.

With tepid demand and rising fuel costs, the near-term outlook for Indian carriers remains challenging, especially for those already under financial stress.