Brokerage firm Equirus reported that the Indian aviation sector showed signs of a gradual recovery in international travel even as domestic demand moderated. The firm said international passenger recovery accelerated sequentially, supported by rising overseas volumes and improving load factors, while cautioning that traffic remained below the year-ago level. Equirus noted that international passenger traffic rose eight per cent month-on-month in August to around 2.6 million (mn), and that revenue passenger kilometres (RPKs) increased nine per cent. Demand growth outpaced capacity sequentially, lifting the international passenger load factor to about 77.2 per cent, although international traffic was still roughly 13 per cent below the same month last year. The brokerage observed that these trends pointed to a potential recovery in overseas travel in the near term. Domestic activity, by contrast, remained subdued, with domestic passenger traffic declining five per cent year-on-year and eleven per cent month-on-month to around 12 mn. Domestic RPKs fell five per cent year-on-year and 12 per cent month-on-month, and available seat kilometres (ASKs) moderated by nine per cent sequentially while flight departures were down eight per cent year-on-year. With demand declining slightly faster than capacity, the domestic passenger load factor eased to about 83.1 per cent, down 256 basis points month-on-month but marginally higher than a year earlier. Cost pressures were highlighted as a persistent challenge, with Brent crude at around USD 90.1 per barrel in August, up 32 per cent year-on-year, and Singapore jet fuel near USD 154.7 per barrel, up 83 per cent. The rupee weakened to around Rs 95.7 per US dollar, which continued to push up dollar-denominated expenses such as aircraft leases and maintenance. The brokerage emphasised that these input cost dynamics would remain material for carrier profitability. On market share, IndiGo strengthened its domestic share to about 67.2 per cent, while Air India Group's domestic share eased to roughly 24.2 per cent year-on-year. Equirus warned against reading monthly share moves as structural shifts and noted that an evolving capacity mix, with some carriers deploying more international capacity, could shape competitive dynamics in the coming months.