Air travel in India may not get cheaper anytime soon. Domestic passenger traffic is slowing, but airlines are cutting flights faster than demand is falling, keeping the planes that do fly more than 85% full and giving carriers less reason to cut fares.
Average airfares across 72 domestic sectors rose about 20.5% between March 2025 and June 2026, according to Directorate General of Civil Aviation (DGCA) data cited by the civil aviation ministry in a written reply to the Rajya Sabha on 27 July. Analysts have estimated a sharper increase of around 35%, although the estimates are not directly comparable.
Domestic passenger traffic, meanwhile, has lost momentum. It grew just 0.64% year-on-year in January-July this year, its slowest pace in five years. In July, traffic fell about 5% from a year earlier.
Average ticket prices are now hovering in the â‚ą7,000-7,500-odd range, compared with â‚ą5,000-5,500 a year earlier, a rough comparison of available data suggests. Ticket prices vary depending on the route and time of the flight.
The divergence between fares and passenger traffic is becoming clearer in the capacity data. In July 2025, domestic demand and airline capacity both declined by around 3%, broadly keeping supply in line with the fall in passengers. In July this year, capacity fell around 9%, roughly twice the rate of the decline in demand, according to data from UK-based aviation consultancy OAG and the DGCA.
The tighter supply is visible across airlines. DGCA data show July departures fell 38% at SpiceJet, 19% at Air India, 18% at Air India Express, 7% at Akasa Air and 3% at IndiGo from a year earlier.
“Airlines have cut capacity sharper than fall in demand. And, so even with lesser supply or lesser seats on offer and there is lower demand, the ticket prices have firmed up. A 15-day advance booking trend over the last few months shows ticket prices are up at least 35%,” said Gagan Dixit, senior vice president, oil and gas and aviation, at brokerage firm, Elara Securities.
Airlines have cited operational constraints, higher jet fuel prices and longer flying hours because of airspace restrictions over Pakistan and continued turmoil in West Asia, among other factors, for capacity adjustments.
The capacity pullback is more than a one-month shift. Domestic departures in July fell to 82,258, from 89,217 in July 2025 and 92,066 in July 2024. That is nearly 11% below the 2024 peak and 8% below a year earlier—almost 10,000 fewer flights than in 2024.
Departures had risen from 74,875 in July 2022 to 87,086 in 2023 and 92,066 in 2024 before falling for two consecutive years. The 2022 figure was still part of the pandemic recovery, when airlines were rebuilding schedules; the more significant trend is the expansion through 2024 followed by the pullback.
“Overall traffic has weakened because of higher fuel costs, muted demand, and airlines rationalizing capacity by cutting or pausing unviable routes,” said Jainam Shah, aviation analyst at Equirus Securities.
Yet airlines are not flying empty. The passenger load factor, or PLF, rose from 70.5% in July 2022 and 77.7% in July 2023 to the mid-80s, reaching 85.7% in July 2025 and 85.3% this year. Put simply, nearly 85 of every 100 seats are occupied, despite July being a seasonally weak month for air travel because of the monsoon.
That matters for passengers because fares depend not only on demand, but also on how many seats airlines put into the market. If carriers continue to trim capacity faster than demand falls, fares are likely to stay elevated.
The effect is already visible in the travel-booking business. Aloke Bajpai, chairman, managing director and group chief executive of Le Travenues Technology Ltd, which operates ixigo, said during the company's 6 August investor call that higher ticket prices, rather than customer volumes, drove growth in its air-ticketing business in April-June.
“The average transaction value that we have seen, increased 22% year-on-year domestically. And on international we have seen an increase of 38% year-on-year,” he said.
