Tuesday, June 13, 2023

Despite Go First crisis, domestic air traffic up 15 per cent in May on high demand

 New Delhi: Domestic air traffic grew by 15% year-on-year in May 2023 to about 1.32 crore passengers. This is 8% higher than the pre-Covid month of May 2019. The growth in traffic comes even as the budget carrier, Go First, suspended its flights on May 3 and is yet to restart operations.

According to data shared by rating agency ICRA, the domestic air passenger traffic for May 2023 is estimated at 131.8 lakh, marginally higher by 2.3% in comparison to 128.9 lakh in April 2023. Further, it witnessed a YoY growth of 15% in comparison to 115 lakh in May 2022 and 8% higher than pre-Covid levels of 122 lakh in May 2019.

ICRA noted that airlines’ capacity deployment in May 2023 was higher by 1.4% than in May 2022, thus reaching the pre-Covid levels of May 2019. It is estimated that the domestic aviation industry operated at a passenger load factor (PLF) of 94% in May 2023, against 83% in May 2022 and 90% in May 2019 (pre-Covid levels).

Go First, which is going through insolvency proceedings, used to carry 8-9 lakh passengers a month. The suspension of its flight is prompting other airlines to increase their fleet and benefit from the vacuum created, especially during the peak summer season.

Suprio Banerjee, Vice-President & sector head, Corporate Ratings, ICRA, said despite a healthy recovery in passenger traffic, the domestic aviation industry continues to face challenges due to elevated ATF prices and depreciation of INR vis-à-vis US$ as against the pre-Covid era, both of which have a major bearing on the airlines’ cost structure. He added that the airlines’ efforts to ensure fare hikes proportionate to their input cost increases, will be key to expanding their profitability margins.

13/06/2023 New Indian Express

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