India August air passenger traffic rises 5% on month
NEW DELHI: Domestic air passenger traffic rose 5% sequentially in August to nearly 10.2 million passengers, ratings agency Icra Ltd. has said.
The growth in August came after two consecutive months of decline in India’s domestic air passenger traffic. While the August traffic is around 52% higher when compared with year-ago numbers, it is still nearly 14% lower than the pre-pandemic level seen in August 2019.
Domestic air traffic rose around 131% year-on-year during April-August, Icra said, adding that the numbers remain nearly 11% lower than traffic seen during the same time period in the pre-covid year of 2019.
It is estimated that the domestic aviation industry operated at a passenger load factor (PLF), or capacity utilisation, of around 80% in August this year, against nearly 72% in August 2021 and around 85% in August 2019, the rating agency said.
International air passenger traffic for Indian airlines has also been on an upswing since the resumption of international scheduled commercial flight operations in March 2022. There is a renewed focus on the high-yield international segment by Indian airlines which continue to be affected by hefty fuel bills and weak rupee. International air passenger traffic for Indian airlines stood at around 26 lakh in August, up 32% from pre-covid levels, ICRA said.
Capacity deployment by Indian airlines was higher by around 2% on month to over 79,000 departures but still 10% less than the pre-covid level, Icra said.
Icra said it continues to maintain a negative outlook on the Indian aviation industry as the financial performance of Indian airlines is likely to remain under pressure in the near term despite a healthy recovery in domestic passenger traffic.
“Elevated ATF (aviation turbine fuel) prices will continue to pose a major threat to earnings and liquidity profile of the airlines in the near to medium term. Also, the depreciation of the INR against the US$ (which adversely impacts lease rentals, maintenance cost and other overheads) will have a major bearing on the cost structure of airlines,” Suprio Banerjee, Vice President & Sector Head – Corporate Ratings, Icra, said.
While ATF prices in September have declined 0.7% sequentially, they are still higher by around 83% on a year-on-year basis. The increase in yield for airlines has not been adequate to offset the impact of the rising fuel prices, Icra said.
“The likely near-term relaunch of Jet Airways and the entry of low-cost domestic carrier, Akasa Air, will further intensify competition in the domestic aviation industry. The airlines’ efforts to maintain and/or grow their market share will limit their ability to expand margins in an elevated fuel cost environment,” Banerjee added.
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