Airlines set to step up bank borrowing

BANK LENDING TO the aviation sector is expected to rise in 2026 after touching a threeyear low last year, driven by a fresh round of aircraft inductions, higher staffing costs and growing overseas operations, according to airline executives and banking data.

- YARUQHULLAH KHAN

Industry executives told FE that airlines are likely to return to banks as they prepare to take delivery of a larger number of aircraft, expand international networks and manage higher lease rentals, fuel costs and foreign exchange exposure. Increased hedging requirements amid a weakening rupee are also expected to add to funding needs.

"Increased hiring due to new flight duty norms, coupled with setting up ground staff at international hubs, will push overseas payouts up in 2026, which typically means higher borrowing," an airline executive said.