Domestic air passenger traffic grows by 23% on Y-O-Y basis in Aug

The aviation industry is estimated to have reported a net loss of around ₹17,000-17,500 crore in FY23 due to hike in ATF prices coupled with the depreciation of the US dollar

Domestic Air Passenger Traffic

New Delhi: The domestic air passenger traffic in India has increased 23% in August this year as compared to same month last year. About 1.24 crore people travelled through the air in August this year, which is about 6% up higher than recorded during the pre-Covid level in August, 2019, said credit rating agency Icra Limited on Wednesday.

In its report, Icra Ltd said that capacity deployment in the reporting month grew 10% in August vis-a-vis last year and up by 1% in comparison to the pre-COVID levels (August 2019). “The outlook on the domestic aviation industry is ‘stable on the back of the fast-paced recovery in domestic passenger traffic in the previous fiscal and expectations of the trend continuing in this fiscal as well,” said the agency.

Also Read: Domestic airlines’ passenger traffic grows 36.10% annually

The private airlines got an improved pricing power, which was reflected in better yields for them. The revenue per available seat kilometre-cost per available seat kilometre (RASK-CASK) also got improved, likewise. The report further stated that same trend is expected to continue with a year-on-year decline in aviation turbine fuel (ATF) prices since April this year and relatively stable foreign exchange rates.

The report, however, noted that the domestic airline companies are unable to gain much out of the increased passenger traffic owing to sequential increases in fuel prices, which remain high at levels vis-a-vis pre-Covid levels. Depreciation of the rupee against the US Dollar, as compared to the pre-Covid levels, is another major issue the airlines are grappling with.

Also Read: Costly tickets, lack of facilities hit footfall at Darbhanga airport

Icra Ltd, however, maintained that the pace of recovery in industry earnings is likely to be gradual, owing to the high fixed-cost nature of the business. The industry is estimated to have reported a net loss of around ₹17,000-17,500 crore in FY23 due to hike in ATF prices coupled with the depreciation of the US dollar.

The report said that net loss to the aviation sector in India is much lower than FY 2022, when the net loss stood around ₹21,700 crore, which was mainly driven by the airlines improved ability to shore up their yields without impacting the demand. It further hoped that the net loss is expected to reduce gradually to ₹3,000-5,000 crore in FY24 owing to healthy grwoth in passenger traffic and smart pricing.

Lucknow airport records 46% increase in cargo movement

After registering an increase in passenger traffic, Chaudhary Charan Singh International Airport (CCSIA), Lucknow, has recorded 46% growth in cargo movement. Around 1,900 tons of goods were transported through airport last month as compared to 1,300 tons in August 2022.

Also Read: Amazon launches air e-commerce cargo service in India

Even for the April-August 2023 period, the cargo tonnage increased by 33% to 8,400 tons as compared to 6,300 tons in the same period previous year. Speaking on the cargo volume growth, CCSIA spokesperson said, “Lucknow airport is gradually becoming a cargo hub as exporters from Kanpur and other neighbouring cities have started moving their items via CCSIA.

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