The global financial crisis has adversely impacted the Indian aviation sector and it has posted 5 per cent decrease in domestic air traffic for the calendar year 2008. About
411 lakh people used air services in 2008 as compared to 433 lakh in 2007. Number of air travelers posted negative growth rate first time in last six years.

High air fares and low customer spending affected the airline industry during the period. Almost all leading air lines posted negative passenger growth rate except low cost carriers IndiGo and SpiceJet and south-based Paramount.

International crude rates surged to its peak level in the period between April to September leading to increase in Jet fuel prices. Air lines hiked air fares causing decline in number of air travelers.

Government has expressed concerns over declining growth of Indian aviation sector. Union Aviation Minister, Praful Patel said, "The slowdown in aviation is having a trickle down impact on everything. Lesser number of people flying means poor finances for airlines and also affects airport development projects among other things."

Government may increase Foreign Direct Investment limit in the aviation sector to help the ailing industry.