Saturday, July 23, 2022

Domestic air traffic hovers close to pre-Covid levels in June

Domestic air traffic is hovering close to pre-pandemic levels with the volume of  passengers travelling on domestic airlines in June only 12.6%  lower compared to the same month in 2019, according to the latest data shared by the Directorate General of Civil Aviation (DGCA). However, volumes had almost touched pre-pandemic levels in May.

In June, the domestic airlines flew 10.51 million passengers on local routes as against 12.02 million in the corresponding month three years back, resulting in a dip of 12.6%. Sequentially, the traffic fell 13% during the month from 12.08 million in May, which according to Icra, was primarily due to the seasonality impact related to the re-opening of schools. Year-on-year (y-o-y), it was 237.7% higher.

May traffic of 12.08 million passengers was very close to the traffic that was witnessed in May 2019 at 12.2 million.

IndiGo carried 5.98 million passengers in June as against 6.38 million in May. SpiceJet flew 1 million passengers in comparison to 1.15 million during the preceding month. Go First’s volumes fell from 1.28 million in May to 0.99 million in June. However, Vistara improved from 0.98 million in May to 0.99 million in June.

While IndiGo improved its market share from 55.6% in May to 56.9% in June, SpiceJet’s share slipped from 10% to 9.5% and that of Go First from 11.1% to 9.5%. Vistara raised its share from 8.6% in May to 9.4% in June.

“The recovery in passenger traffic is expected to be relatively faster in FY23 with the return to normalcy. However, an overhang of any further Covid wave looms on the sector and will be monitorable. Elevated aviation turbine (ATF) prices aggravated by geo-political issues will remain a near-term challenge for the industry and will continue to weigh on the profitability of Indian carriers,” said Suprio Banerjee, vice president and sector head, Icra.

Banerjee said the recent depreciation of the rupee has further added to the industry’s woes, given around 35-50% of the airlines’ operating expenses are denominated in US dollar. “Also, led by rising ATF prices, the yields for the airlines have started inching up and are estimated to have moved up by around 20% over the last year,” he added.

23/07/22 Financial Express

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