ICRA : Domestic air passenger traffic for Oct estimated at 114L

Insight Online News

New Delhi, Nov 11 : 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, rating agency IRCA said on Friday.

However, the passenger traffic is still short by 8%, compared to pre-Covid levels i.e., September 2019, the agency said.

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,” the report authored by Suprio Banerjee, Vice President and Sector Head , Corporate Ratings, ICRA Limited, said.

The agency said 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,” the agency said.

The agency said 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, it said.


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