Domestic passenger traffic is estimated to have grown by 83% year-on-year to 10.5 million in April as COVID-19 infection cases have eased, leaving a gap of just 5% compared to pre-pandemic levels, ICRA said Monday.
Indian airlines had flown about 11 million passengers in April 2019.
However, domestic airlines saw international passenger traffic marginally surpass pre-pandemic numbers (about 1.83 million) with a total volume of about 1.85 million, it said.
It also said that rising jet fuel (ATF) prices continue to emerge as a major threat to the recovery process due to ongoing geopolitical issues surrounding the Russia-Ukraine conflict.
In April 2022, average daily departures were about 2,726, significantly higher than average daily departures of about 2,000 in the same month last year and higher compared to about 2,588 in March 2022, said Suprio Banerjee, vice president and sector head, ICRA.
According to him, the average number of passengers per flight in the previous month of April was 128 compared to 133 passengers per flight in March 2022 and lower than the average of 135 passengers per flight in April 2019.
“Although the recovery in passenger traffic is expected to be relatively rapid in fiscal 2023, given the near-normal situation in domestic flight operations, there is a risk of an overhang of further Covid waves in the sector,” added Mr. Banerjee.
Elevated ATF prices, exacerbated by geopolitical issues, will remain a short-term challenge for the industry and continue to weigh on Indian airlines’ profitability, he said.
ATF prices are up about 89% year-to-date month-to-date amid elevated crude oil prices due to geopolitical issues surrounding Russia’s invasion of Ukraine, ICRA said.
Soaring ATF prices will pose a serious threat to industry profits in FY2023, it said, adding that a return to normal overall will lead to a recovery in passenger load factors, which in turn will boost revenues.
However, increased ATF prices will continue to weigh on Indian airlines’ revenues in fiscal 2023, it said.