The domestic aviation market witnessed another month of contraction in July, with passenger traffic falling 4.8% sequentially as airlines continued to rationalise capacity. Market leader IndiGo, though, further strengthened its dominance taking its market share beyond 67% for the first time.
On the other hand, SpiceJet hit a multi-year low across key operational metrics during the month, with its domestic market share plunging to just 1.6% down from 3.9% in January 2026.
According to data released by the Directorate General of Civil Aviation (DGCA) on Thursday, domestic airlines carried 12 million passengers in July compared to 12.6 million passengers in July 2025. Traffic was also lower than the 13.46 million passengers in June 2026.
The decline comes after the sharp summer travel peak in May with airlines continuing to calibrate capacity and network deployment amid changing demand conditions.
Despite the contraction in monthly traffic, passenger numbers during the first seven months of the year remained marginally higher than last year. Domestic airlines carried 98.4 million passengers during January-July 2026, up 0.64% from 97.78 million passengers in the corresponding period last year.
IndiGo emerged as the biggest beneficiary of the capacity realignment, with its domestic market share rising to a record 67.4% in July, up from 66.3% in June. The airline carried 8.08 million passengers during the month, accounting for more than two-thirds of all domestic air traffic.
The increase further consolidates IndiGo’s position in the domestic market at a time when overall traffic is contracting. The airline’s market share has risen steadily through the year, from 63.6% in January to 67.4% in July.
The Air India Group, meanwhile, retained a 24% share of the domestic market in July, broadly unchanged from 23.9% in June. The group carried 2.88 million passengers during the month, compared with 3.22 million in June.
Together, IndiGo and the Air India Group accounted for 91.4% of domestic passenger traffic in July, highlighting the increasing concentration of the Indian aviation market around the two major airline groups.
Akasa Air’s market share declined to 5.5% in July from 6.4% in June, while SpiceJet’s share fell further to 1.6% from 1.9%. Akasa carried 0.67 million passengers during the month, while SpiceJet carried 0.19 million.
Regional carriers Alliance Air, Star Air, Fly91 and IndiaOne Air continued to account for a relatively small portion of the market.
Passenger load factors remained healthy despite the decline in traffic, suggesting that airlines have been able to align capacity with demand. Akasa Air recorded the highest load factor among the major carriers at 91.9%, followed by Air India Group at 83.2% and IndiGo at 82.4%.
SpiceJet recorded a load factor of 84%, while Star Air and Alliance Air reported load factors of 74.3% and 59.5%, respectively. IndiGo’s load factor, however, declined from 85.1% in June to 82.4% in July.
Operational performance remained broadly stable. The overall cancellation rate for scheduled domestic airlines stood at 0.62% in July, marginally lower than the 0.63% recorded in June.
Technical issues accounted for the largest share of cancellations at 39.9%, followed by operational reasons at 27.4% and adverse weather at 22.7%. Commercial reasons accounted for just 0.6% of cancellations, while miscellaneous reasons made up 9.4%.
The data also showed a significant variation in cancellation rates across airlines, with IndiGo reporting a cancellation rate of 0.31% and the Air India Group at 0.41%. Akasa Air and Fly91 reported no cancellations during the month, while the rate was significantly higher for smaller carriers such as IndiaOne Air and SpiceJet.