At a GE Aerospace panel convening in New Delhi on Monday, Air India's chief commercial officer Nipun Aggarwal put forward the view that holding down ticket prices alongside operational costs would be central to keeping the country's aviation growth on track. He noted that flying has historically been positioned as a luxury rather than an everyday option, a framing he contended holds back potential passengers who might otherwise move away from rail travel. Alongside those remarks, he drew attention to the scope for strengthening air links across regions and putting underused airports — those sitting beyond the main urban centres — to fuller purpose.
Cirium, an aviation analytics firm, recorded higher average economy-class fares year-on-year across 18 of India's 20 most-travelled domestic routes in June 2026. That pattern, according to IndiGo's chief strategy officer Aloke Singh, illustrated a structural tension in the market: when rising costs are passed through to ticket prices, passenger volumes tend to pull back, given how acutely fare levels shape demand across the country's aviation sector. On 11 routes, ticket prices climbed past the 15 percent mark, while five others saw them push beyond 30 percent. Ticket prices in economy class on flights between Mumbai and Bengaluru climbed by 38.8 percent on average.
Ticket prices on flights climbed after armed conflict flared across West Asia, with jet fuel costs rising and aircraft rerouted along lengthier paths following the closure of certain airspace corridors.
According to ratings agency ICRA, the number of passengers travelling on domestic Indian flights dropped by 6.3 per cent against the same month a year earlier, reaching 12.13 million in August 2026, with the cumulative April-through-August tally also slipping — down 1.1 per cent to 66.79 million over that five-month stretch. Over the same five-month period, the volume of overseas travellers carried by Indian airlines dropped by roughly a fifth compared with the same period a year earlier.
On the margins of the event, Aggarwal told a broadcast outlet that the tax load placed on aviation outweighs what railways face, and put forward the case for a fresh look at how the sector is taxed. High taxes on aviation turbine fuel — a cost that weighs heavily on airline operations — were cited as a barrier to bringing down ticket prices, with Aggarwal adding that a reduction in fares for the average traveller in India would drive a substantial rise in passenger numbers beyond current levels.
Jet fuel's share of total operating costs at carriers such as Air India, IndiGo, and SpiceJet climbed into the 55-to-60 per cent band — around twice the 30-to-40 per cent range the industry treats as typical — with their trade body attributing the strain to a combination of elevated fuel prices and flight schedule disruptions. Fuel expenses measured against each available seat kilometre climbed 80.4 percent compared with the same period a year earlier, IndiGo disclosed on its FY27 June quarter earnings call, with the airline attributing the movement to higher prevailing fuel prices.
Reinforcing home-grown supply networks was also identified as a concern facing the industry. GE Aerospace's South Asia chief executive, Vikram Rai, told those gathered at the event that procurement from Indian suppliers is on course to roughly double in value across the five-year window running from 2025 through 2030. GE Aerospace directed roughly $200 million toward its Indian supply chain operations during 2025, with Rai noting that the investment reflected the company's view of the country's aviation ecosystem and manufacturing capabilities as a viable base for growth.
