“The domestic aviation industry continues to witness recovery, with domestic passenger traffic for October 2022 estimated at ~114 lakh, ~10% higher compared to ~103 lakh in September 2022 and ~26% higher in comparison to the domestic passenger traffic in October 2021, although it fell short by ~8%, compared to pre-Covid levels i.e., September 2019. For 7M FY2023 (April-October 2022), domestic passenger traffic is estimated at ~740 lakh, a YoY growth of ~91%, and lower by ~11% compared to April-October 2019 (pre-covid levels).
The airlines’ capacity deployment in October 2022 was ~16% higher than in October 2021. However, it was lower by ~11% than the pre-Covid levels. It is estimated that the domestic aviation industry operated at a passenger load factor (PLF) of ~84% in October 2022, against ~77% in October 2021 and ~84% in October 2019.
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 November 2022 higher by ~47% on a YoY basis. Further, the same increased by 4.2% 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 the 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.”
ICRA Comments on Aviation Industry Monthly Domestic Passenger Traffic Data for November 2022