Domestic passenger traffic witnesses 19-20% sequential growth in February 2022

Domestic passenger traffic witnessed a 19-20 per cent sequential growth in February 2022 with waning Omicron wave, according to ICRA. However, the rising aviation turbine fuel (ATF) prices and the Russia-Ukraine conflict continue to pose a serious threat for the aviation sector.

The average daily departures were at 2,023, notably lower compared to 2,297 in February 2021, and marginally lower compared to 2,032 in January 2022. The average number of passengers per flight during February 2022 was higher at 135 vis-à-vis 102 in January 2022

The waning Omicron wave resulted in a sequential growth in the domestic air passenger traffic by 19 per cent at 76 lakh in February 2022 compared to 64 lakh in January 2022. However, it remained marginally lower by 2 per cent compared to 78 lakh in February 2021.

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The airlines’ capacity deployment for February 2022 was around 12 per cent lower than February 2021 (56,634 departures in February 2022 against 64,327 departures in February 2021). On a sequential basis, the number of departures in February 2022 were lower by 10 per cent, given the overhang of the waning Omicron wave and the lower number of operating days in February. However, adjusting for similar tenure of days, the number of departures stood almost flat compared to last month.

As per the recent report published by ICRA on aviation, Suprio Banerjee, Vice President & Sector Head, ICRA, said, “The sequential recovery improved in February 2022 with the waning Omicron wave and the resultant picking up of demand in passenger travel. However, due to the impact of multiple Covid waves in the current fiscal, the passenger traffic for 11M FY2022 remained 44 per cent lower than 11M FY2020 (pre-Covid level). The same is further threatened by the sharp rise in ATF prices, amid the Russia-Ukraine conflict.”

Operations capacity

With effect from October 18, 2021, the Ministry of Civil Aviation (MoCA) has allowed the restoration of permitted capacity to 100 per cent for 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 1, 2021, due 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, 2021, increasing it further to 85 per cent, with effect from September 18, 2021.

As for the scheduled international operations, according to the last directive dated February 28, 2022 of the Director General of Civil Aviation (DGCA), the suspension is extended till further notice. While the scheduled international operations are yet to start, the MoCA has permitted international operations under the Vande Bharat Mission (VBM) and the Air Transport Bubbles (ATB).

International passenger traffc

Under the VBM for evacuation of Indian citizens from foreign countries, which started from May 7, 2020, the international passenger traffic (inbound and outbound) for Indian carriers stood at 75.4 lakh fromMay 7, 2020 to February 28, 2022. For February 2022, the international passenger traffic for Indian carriers under the VBM was recorded at 5.54 lakh, a sequential decline of 1.8 per cent.

One major concern that continues to be a drag on the aviation sector is the ATF prices, which have seen a sharp increase of 57 per cent on a y-o-y basis till March 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 FY2022.

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