India daily air traffic touches new high since onset of covid

The daily domestic air passenger traffic on 27 November was recorded at 409,831 passengers and 2739 departures. The previous high since the onset of covid pandemic was recorded on Apr 17, 2022 at 407,975 passengers. The highest flight count since onset of pandemic was recorded on 12 June, 2022 at 2882 flights.

The average daily pre-covid air traffic in 2019 was around 400,000 passengers and nearly 2,900 daily flight departures were recorded. This is not the first time that the daily air traffic has breached the 4-lakh mark but the demand above 4 lakh passengers has not sustained so far.

India’s air passenger traffic in October rose 10.2% on month and 27% on year to 114.07 lakh air passengers. IndiGo was the largest airline with a market share of 56.7% in October compared with 57.7% in September.

As per ICRA, rising prices of aviation turbine fuel (ATF) and the general inflationary environment continue to stifle the industry earnings, with ATF prices in November 2022 being higher by around 47% on a YoY basis. Moreover, the same increased by 4.2% sequentially. While airlines have been increasing the yields, the same has not been adequate to offset the impact of the rising ATF prices,ICRA said in a recent note.

While a meaningful improvement in passenger traffic is expected in FY2023, the pace of recovery in the industry earnings will be sluggish and the industry is expected to incur a net loss of around Rs. 150-170 billion owing to elevated costs, Icra had added.

However, this will be notably lower compared to the estimated net loss in FY2022, primarily driven by recovery in passenger traffic and lower interest burden, following the significant reduction in Air India Limited’s debt before the divestment by the Government of India, the ratings agency said.