New Delhi- Domestic air passenger traffic is likely to grow 8-13 per cent in the current fiscal and the aviation industry is also expected to trim the losses further, credit rating agency Icra said on Thursday.
Icra, in its mid-year update on Indian aviation, also maintained a ”stable outlook” on the industry, amidst the continued recovery in domestic and international air passenger traffic in FY2024, and improved pricing power of the carriers. After the fast-paced recovery in FY2023, Icra said it estimates growth in domestic air passenger traffic in FY24 at 8-13 per cent, thus reaching 150-155 million passenger traffic, surpassing the pre-Covid levels of 141.2 million passengers in FY2020.
It said that the domestic air passenger traffic during the first five months of the current fiscal stood at 63.2 million, witnessing a year-on-year growth of 20 per cent from 52.6 million a year earlier and 7 per cent higher than the pre-Covid levels of 58.9 million (5M FY2020).
The international passenger traffic for Indian carriers, according to the ratings agency, surpassed the pre-Covid levels in FY2023, although it trailed the peak levels of 25.9 million in FY2019.
It is expected to cross this level in the current fiscal, with an estimated 25-27 million passengers, Icra said.
”Given the fast-paced recovery of air passenger traffic in FY2023 and continuation of the same in the current fiscal, coupled with improved pricing power, the RASK-CASK spread of some of the Indian airlines turned positive since Q3 FY2023,” Suprio Banerjee, Vice President and Sector Head for corporate ratings at Icra Limited, said.
”The industry is thus estimated to report a significantly lower net loss of Rs 30-50 billion in FY2024 compared to an estimate of Rs 170-175 billion in FY2023,” he added.
Moreover, the industry witnessed a better pricing power, as reflected in improved yields and thus the revenue per available seat kilometre – cost per available seat kilometre (RASK-CASK) spread of the airlines, Icra said.
The pricing power is expected to continue with a YoY decline in aviation turbine fuel (ATF) prices since April 2023 (notwithstanding the recent uptick) and relatively stable foreign exchange rates, the rating agency said.
Be Part of Quality Journalism
Quality journalism takes a lot of time, money and hard work to produce and despite all the hardships we still do it. Our reporters and editors are working overtime in Kashmir and beyond to cover what you care about, break big stories, and expose injustices that can change lives. Today more people are reading Kashmir Observer than ever, but only a handful are paying while advertising revenues are falling fast.