Domestic air passenger traffic grew by approximately 5-6 per cent to 111 lakh in December 2021, compared to 105 lakh in the previous month, according to credit rating agency ICRA. The same reflects a y-o-y growth of 52 per cent, over 73 lakh in December 2020. However, emergence of the new Covid variant and restrictions impacting air travel remain near term challenges, it cautioned.
The airlines’ capacity deployment for December 2021 at 86,465 departures was 35 per cent more than that in in December 2020 64,002 departures. On a sequential basis, the number of departures in December 2021 was higher by 7 per cent, as Covid-19 infections demonstrated a downward trajectory.
Suprio Banerjee, Vice-President & Sector Head, ICRA Ltd said, “For December 2021, the average daily departures were at ~2,800, notably higher than the average daily departures of ~2,065 in December 2020, and somewhat higher than ~2,700 in November 2021. The average number of passengers per flight during December 2021 was close to ~129, which was largely flat compared to November 2021.”
Sequential recovery continued in December 2021, largely driven by leisure travel, boosted by calendar year-end festival and holiday travel. However, demand continues to remain subdued from the corporate traveller segment, as reflected by the passenger traffic for 9M FY22 remaining ~44 per cent lower than 9M FY20, it said.
Moreover, with the emergence of the new Covid variant and the recent trend of rising infections, few states have already started announcing certain curbs on domestic air travel, posing a serious threat to domestic passenger traffic recovery in the near term, it furthe said.
Curbs in effect
With effect from October 18, 2021, the Ministry of Civil Aviation has allowed 100 per cent capacity utilisation for domestic operations.
As for the scheduled international operations, which remains suspended since the start of the pandemic, As per the last directive of the DGCA, dated December 9, 2021, the suspension of scheduled international operations is extended till January 31, 2022, due to the pandemic.
One major concern that continues to be a drag on the aviation sector is the aviation turbine fuel (ATF) prices, which have seen a sharp increase of 49 per cent on a y-o-y basis till January 2022. It 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.