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July 19, 2024

ICRA Comments on Aviation Industry Monthly Domestic Passenger Traffic Data for September 2022

Domestic Passenger Traffic Data for September 2022

“The domestic aviation industry continues to witness recovery. Domestic passenger traffic for September 2022 is estimated at ~103 lakh, ~2% higher compared to ~101 lakh in August 2022 and ~46% higher in comparison to the domestic passenger traffic in September 2021. Though it fell short by ~10%, compared to pre-Covid levels i.e. September 2019. For H1 FY2023 (April-September 2022), domestic passenger traffic is estimated at ~627 lakh, a YoY growth of ~111%, and lower by ~11% compared to April-September 2019 (pre-covid levels).

The airlines’ capacity deployment in September 2022 was ~27% higher than September 2021. However, it was lower by ~9% than the pre-Covid levels. It is estimated that the domestic aviation industry operated at a passenger load factor (PLF) of ~84% in September 2022, against ~73% in September 2021 and ~86% in September 2019. The international passenger traffic for Indian carriers in September 2022 strongly surpassed the pre-Covid level of ~25.1 lakh by ~34%.

A steady rise in prices of aviation turbine fuel (ATF) and a general inflationary environment continue to dampen the industry earnings, with ATF prices in October 2022 higher by ~60% on a Y-o-Y basis. However, the same declined by 4.5% sequentially. While airlines have been increasing yields, in ICRA`s view the same has not been adequate to offset the impact of the rising ATF prices.

A quick recovery in domestic passenger traffic is expected in FY2023, aided by normalcy in operations and waning pandemic. However, the earnings recovery for domestic airlines will be slow-paced due to elevated ATF prices in addition to the rupee depreciation against the US$ amid a heightened competitive environment.”

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