Air traffic close to pre-Covid levels in April 2022: Icra

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The domestic air passenger traffic increased a sharp 83% year-on-year (y-o-y) to an estimated 10.5 million, bringing it closer to pre-Covid levels of April 2019 — remaining only about 5% below the 11-million passengers mark recorded then.

The international passenger traffic for Indian carriers also witnessed a surge to about 1.85 million during the month, marginally surpassing pre-Covid levels.

Rising aviation turbine fuel (ATF) prices due to the ongoing geopolitical issues linked to the Russia-Ukraine conflict continue to evolve as a major threat to the recovery process, according to a report from Icra.

The airlines’ capacity deployment for April was nearly 36% higher than April 2021 — with 81,777 departures in April 2022 against 59,967 departures in April 2021. On a sequential basis, the number of departures in April 2022 was higher by around 2%, given the near normalcy seen in business operations. However, sequentially, the domestic passenger traffic in April 2022 was almost flat compared with about 10.7 million in March 2022.

For April 2022, the average daily departures were at about 2,726, notably higher than the average daily departures of nearly 2,000 in April 2021, and higher compared with around 2,588 in March 2022. The average number of passengers per flight during April 2022 was 128, against an average of 133 passengers per flight in March 2022 and lower than an average of 135 passengers per flight in April 2019.

Suprio Banerjee, vice-president and sector head, Icra, said: “Though recovery in passenger traffic is expected to be relatively fast-paced in FY23, given the near normalcy situation seen in domestic airline operations, overhang of any further Covid wave looms on the sector. The elevated ATF prices aggravated by geo-political issues will remain a near term challenge for the industry and will continue to weigh on the profitability of Indian carriers.”

With the resumption of scheduled international operations since March 27, 2022, and reversion to bilaterally-agreed capacity entitlements, the international passenger traffic for Indian carriers in April 2022 surged to 1.85 million, which also marginally surpassed the international passenger traffic of 1.83 million witnessed in the pre-Covid level of April 2019.

ATF prices have surged by about 89% on a y-o-y basis in May 2022 given the elevated crude oil prices, due to geopolitical issues arising from the Russian invasion of Ukraine. “On an aggregate basis, return to normalcy will lead to recovery in passenger load factors, which in turn will aid revenues; however, elevated ATF prices will continue to weigh on the earnings of Indian carriers in FY23,” the rating firm said in a note.