Domestic air traffic crosses pre-covid level, festive season aids demand indiabusinessport.com

The average daily pre-covid air traffic in 2019 was around 400,000 passengers and nearly 2,900 daily flight departures were recorded. This is not the first time that the daily air traffic has breached the 4-lakh mark. The highest passenger count since the onset of covid pandemic was recorded on Apr 17, 2022 at 407,975 passengers.

Analysts expect the demand momentum to remain strong on the back of festival season and holidays during October-December but it has to be seen whether air traffic is able to maintain a level of above 4-lakh daily air passengers. The average daily air traffic during October so far has been around 3.7 lakh passengers as compared to an average daily count of nearly 3.4 lakh passengers in September.

“The fares have largely been lower than what they were a couple of months back when fare caps were in place. With the entry of new players such as Akasa and Jet Airways, the fares are going to be more competitive and will aid demand. Other than the main festival days or occasions where demand is expected to exceed capacity, fares for travel during Oct-Dec are not as expensive as they were a while ago. Of course, high jet fuel prices and weak rupee always have an impact on the pricing,” an analyst said.

The demand for travel sentiment has been often dampened over the last two years due to covid waves, inflationary environment, and rise in air fares over weak rupee and high jet fuel prices.

Ratings agency ICRA sees the pre-covid air traffic levels to be sustainable only by 2023-24 (Apr-Mar).

“The domestic passenger air traffic in India has grown at a healthy CAGR of ~ 11% over the past decade (i.e. FY2011-20) to reach ~141 million passengers in FY2020. In FY 2021 due to the impact of the Covid-19 and related restrictions it fell by ~62% to ~ 53 million and recovered to ~85 million in FY2022. In the current fiscal, though the momentum has been strong in terms of recovery, as per ICRA`s expectations the passenger traffic is expected to reach pre-covid levels by FY2024,” ICRA said in a recent note.