India's aviation sector may face a weak first half this fiscal year as passenger traffic stagnates because airlines have fewer aircraft available to operate, according to GMR Airports Ltd, the country's largest private airport operator.
GMR, which handles roughly three out of every 10 air passengers in India, expects traffic growth to remain flat in April-September before recovering in the second half of the year as airlines restore capacity and two new airport assets are added to its portfolio.
The outlook from GMR is significant because, together with Adani Airports, they handle about half of India's air passenger traffic, making the two airport operators a key gauge of aviation demand. The forecast also suggests growth could remain uneven in the near term as airlines continue to operate with capacity constraints.
“The first two quarters will be flattish," Saurabh Chawla, chief financial officer at GMR, told Mint. "We have always guided the markets that we will grow about 8-10% year on year. But we have also guided that the first two quarters may not sustain that," he said.
“We also have the Vizag Airport or Bhogapuram Airport, also going live, which will also form part of the portfolio. Taking those two, about 5 million passengers will be added. So, broadly, we should grow by about 5%.”
GMR Airports, which runs three airports in the country, including Delhi airport, expects Bhogapuram airport in Andhra Pradesh to become operational in the second quarter and plans to take over Nagpur airport during the same period.
The company's three operating airports in India—Delhi's Indira Gandhi International Airport, Hyderabad's Rajiv Gandhi International Airport and Goa's Manohar International Airport at Mopa—together handled 114.6 million passengers in FY26, a modest 1% increase from the previous year.
The slowdown has persisted into the current fiscal year. Passenger traffic across GMR's Indian airports fell 4% year-on-year in April to about 9.3 million passengers.
According to Chawla, the impact of the current challenging operating environment is not uniform across GMR-run airports.
In April, Delhi airport handled 6.66 million passengers during the month, largely flat from a year earlier, while Hyderabad saw a sharper 15% decline, reflecting the impact of airline route rationalisation. Goa's Mopa airport, however, recorded a 5.3% increase in traffic.
The trend mirrors weakness across the broader market. Data from the Directorate General of Civil Aviation show domestic passenger traffic at 13.8 million in April, down 3.5% from a year earlier. The decline came after growth moderated to 1.33% in FY26, the slowest post-pandemic.
Adani Airports, which operates eight airports—Mumbai, Navi Mumbai, Trivandrum, Ahmedabad, Jaipur, Lucknow, Mangalore and Guwahati, also reported passenger traffic growth of just 1% in FY26. One out of every four air passengers in India uses an Adani-operated airport. The privately held company and a subsidiary of Adani Enterprises Ltd, does not disclose monthly traffic figures.
While passenger traffic growth remained muted, airport operators benefited from higher tariffs and stronger non-aeronautical income. GMR Airport reported revenue of ₹15,200 crore in FY26, up 40% on year. In the January-March quarter, growth was driven largely by revised tariffs at Delhi airport, where differentiated user development fees (UDF) were introduced for international passengers based on travel class. The tariff revision helped aeronautical revenue at Delhi airport jump 178% in FY26. By comparison, aeronautical revenue at Hyderabad and Goa was flat or lower during the year.
Operational challenges
“The muted passenger growth forecast by GMR is a reflection of the sectoral pressure. It is driven more by capacity constraints of airlines following geopolitical disruptions,” said Ankita Shah, vice-president at Elara Capital.
India's airlines have faced a series of operational challenges over the last one year. Air India announced route cuts in April and May, which continued through September, while IndiGo is expected to rationalize some departures from late August. Together, the two carriers account for about 90% of India's domestic aviation market share.
The sector has also been hit by successive disruptions. Airspace restrictions over Pakistan forced longer flight paths on several international routes beginning in April last year. The fatal Air India crash in June led to heightened regulatory scrutiny and operational checks. New pilot duty regulations affected scheduling, while the West Asia war disrupted air routes and pushed up jet fuel costs.
"Despite these near-term headwinds, GMR's traffic outlook is supported by capacity addition at Bhogapuram and Nagpur, and some growth in its existing portfolio that would probably happen in the second half of the fiscal. In case these new airport additions are delayed, then the passenger traffic growth numbers could vary," Shah of Elara Capital said.
IndiGo, in its post-results commentary, indicated that nearly two-thirds of its capacity to West Asia has already been restored. "That gives some confidence that traffic could improve later in the year," Shah said.
Shah, however, cautioned that any delay in commissioning Bhogapuram airport or completing the Nagpur takeover could affect GMR's growth projections.
Even as passenger growth slows, GMR remains confident that Delhi airport will retain its position as India's largest aviation hub despite the opening of Noida International Airport at Jewar, about 100 km away.
"Jewar has a long way to go before it establishes itself. Creating a two-airport system takes years,” Chawla said. He that Delhi airport's scale, connectivity and established network would help it retain its leadership position even after Jewar opens.
Commercial flights from Jewar are expected to begin from 15 June.
Some cargo traffic could eventually shift to Jewar, particularly from nearby industrial clusters. But the impact on GMR’s cargo business will remain “limited”, he said.
The company is expanding its cargo infrastructure at Delhi, including a new FedEx facility and plans for a cargo city to strengthen its competitive position.
