Economy

Domestic air passenger traffic grew 15-16% in Nov: ICRA

Our Bureau | | Updated on: Dec 07, 2021
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Airlines’ capacity deployment for November 2021 was 49% higher than November 2020

Domestic air passenger traffic grew by 15-16 per cent at around 104-105 lakh in November 2021, compared to 89.85 lakh in October 2021. The same reflects a year-on-year growth of 64 per cent, according to credit rating agency ICRA.

The airlines’ capacity deployment for November 2021 was around 49 per cent higher than November 2020 (80,750 departures in November 2021 against 54,132 departures in November 2020). On a sequential basis, the number of departures in November 2021 was higher by 12 per cent as Covid infections demonstrated a downward trajectory.

Suprio Banerjee, Vice-President & Sector Head, ICRA, said: “For November 2021, the average daily departures were at 2,700, significantly higher than the average daily departures of 1,806 in November 2020, and higher than 2,400 in October 2021. The average number of passengers per flight during November 2021 was close to 129, against an average of 125 passengers per flight in October 2021. Though the recovery continued in November 2021, demand continues to be subdued from the corporate traveller segment as reflected by the passenger traffic being lower by 19 per cent in November 2021 compared to pre-Covid levels. Moreover, threat of new variant, which has pushed the resumption of scheduled international operations, has the potential to derail the domestic recovery, too, if it becomes a source of fresh round of lockdowns/restrictions in the near term.

No major impact of Omicron on air travel in India: ICICI Securities

With effect from October 18, the Ministry of Civil Aviation (MoCA) has allowed the restoration of the permitted capacity to 100.0 per cent for the domestic operations. It may be recalled that the MoCA had reduced the permissible capacity deployment to 50 per cent of pre-Covid levels, with effect from June 1due to the resurgence of the second wave of the pandemic. It had subsequently increased the permitted capacity to 72.5 per cent, with effect from August 12, increasing the capacity further to 85.0 per cent with effect from September 18.

International operations

As for scheduled international operations, it is to be noted that as of the November 26 circular, the Director General of Civil Aviation (DGCA) had directed the resumption of scheduled international operations from December 15 onwards with certain riders related to Covid-19 linked risk categorisation of destination countries. However, as of December 1, the resumption of scheduled international operations has been put on hold till further notice, given the threat of the recent emergence of new variant of Covid. Under the Vande Bharat Mission for evacuation of Indian citizens from foreign countries, which started from May 7, 2020, international passenger traffic (inbound and outbound) for Indian carriers stood at 57 lakh for the period between May 7, 2020 and November 30, 2021. For November 2021, international passenger traffic for Indian carriers under the VBM was estimated at 6.1 lakh, a sequential growth of 15 per cent.

‘Coordinated protocols needed to ease air travel between regions’

One major concern that continues to worry the aviation sector is the aviation turbine fuel (ATF) prices, which have seen a sharp increase of 67.3 per cent on a Y-o-Y basis till December 2021, and this is mainly attributed to increase in crude oil prices. This, coupled with relatively low capacity utilisation of aircraft fleet, will continue to weigh on the financial performance of Indian carriers in FY22. Furthermore, the credit profile of most Indian carriers continues to be characterised by a weak liquidity position.

Published on December 07, 2021

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