New Delhi, Aug. 28 -- The Indian aviation sector is set to face deeper turbulence in FY2026 as net losses are projected to rise to Rs 95,000-1,05,000 crore, up from Rs 55,000 crore in FY2025, according to credit rating agency ICRA.

The widening losses come against the backdrop of slowing passenger traffic growth and rising aircraft deliveries.

ICRA has revised its growth forecast for domestic air passenger traffic for FY2026 to 4-6 per cent, lowering it from the earlier projection of 7-10 per cent. The agency now expects domestic traffic to reach 172-176 million passengers annually.

"During FY2025, the Indian aviation industry benefited from improved pricing power, evident in higher yields, driven by healthy demand for air travel. Howe...