Tuesday, May 25, 2021

Second wave of COVID-19 may delay recovery in air passenger traffic, says report

The second wave of the coronavirus pandemic is likely to delay recovery in air passenger traffic with an 80-85 per cent growth year-on-year this fiscal against the earlier estimate of 130-135 per cent, ratings agency ICRA said on Monday. The domestic passenger traffic, which witnessed a steady ramp-up after resumption of airport operations since May 25 last year and reached 64 per cent of the previous year levels in February, has again suffered a setback, the ratings agency said in a report.

The spike in coronavirus infections towards March-end and April has resulted in several state governments implementing fresh restrictions, resulting in a marginal 0.7 per cent de-growth sequentially in traffic in March. This is as compared to February when passenger traffic grew 1.4 per cent month-on-month, it said.

The average daily number of departing passengers during March 2021 stood at 2.49 lakh; and declined by 28 per cent m-o-m in April to 1.79 lakh. There was a further dip of 56 per cent during May 1 to May 16 as compared to the average of April, according to the report.

ICRA Senior Vice President (Corporate Ratings) Shubham Jain said that in addition to the passengers being apprehensive for air travel, increase in infections forced many state governments to implement strict COVID-19 restrictions during the past two months on air travel.

"The second wave of COVID-19 infections is likely to delay recovery in traffic. The passenger traffic growth is now estimated at 80-85 per cent y-o-y in FY2022 as against our earlier projection of 130-135 per cent y-o-y," Jain said.

He added that this is factoring in the assumption that majority of the population (above 18+ years) will be vaccinated by December, in line with the central government's vaccination policy targets, and the impact of third wave, if any, to be minimal due to mass vaccination.

ICRA expects domestic air travel to recover back to pre-COVID-19 levels by FY2023 and the international sector by FY2024, he added.

"The operating income and operating profits for FY2022 are estimated to decline 12 per cent and 40 per cent to Rs 12,800 crore and Rs 2,560 crore, respectively, as compared to earlier estimates due to revision in traffic," Jain said.

24/05/21 PTI/Economic Times

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