Wednesday, July 15, 2020

Domestic air passenger traffic expected to shrink by 40-45% in FY21: Crisil

Curtailed mobility of people due to the Covid-19 pandemic is expected to shrink India's domestic air passenger traffic by 40-45 per cent in FY21, rating agency Crisil said on Wednesday.

Similarly, India's air passenger traffic in the international sector is expected to plunge by 60-65 per cent, Crisil Research said in a report.

"The demand destruction can be gauged from the fact that even after resumption of domestic air services, the load factor is hovering at 50-60 per cent, with primarily unidirectional flow of traffic, limited largely to essential travel and those returning to their home cities or countries," the report said.

"In the milieu, Indian carriers are expected to log operating losses this fiscal despite lower crude oil prices. And with the Covid-19 pandemic still raging in much of the world, a revival to pre-pandemic levels appears unlikely even next fiscal."

The report cited this as a serious jolt to the Indian domestic air travel industry that had logged double-digit growth in seven of the past ten fiscals before its fortunes took a turn for the worse with the bankruptcy and grounding of a couple of major carriers.
Consequently, the report said the number of domestic air passengers is expected to be 78-83 million this fiscal, similar to fiscal 2016.

"In the first quarter, passenger demand was weak as air services, grounded since March 25, resumed only on May 25, and with capacity limitations in place," it said.

"Domestic demand is likely to be subdued in the seasonally weak second quarter as well. But, the third and fourth quarters are expected to see increased travel owing to the festive season, although it will still be lower on-year."
15/07/20 IANS/Business Standard
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