Air Traffic Grows 13 pc in FY24

In FY24 domestic air passenger traffic is estimated to be 154 million, which recorded 13 per cent growth against the previous year. The domestic air passenger traffic in FY24 thus surpassed the pre-Covid levels of 142 million in FY20. For March 2024, domestic air passenger traffic was estimated at 135.2 lakh, 6.9 per cent higher than 126.4 lakh in February 2024. Further, it grew by 4.9 per cent compared to the same month last year.

The international passenger traffic for Indian carriers for the 11-month period of FY24 till February stood at 270.1 lakh, growing 25 per cent against the previous year and higher than the pre-Covid levels of 218.1 lakh by 24 per cent.

The momentum in air passenger traffic witnessed in FY24 is expected to continue into FY25. However, sequential decline in ATF prices and depreciation of the rupee against the USD over pre-Covid levels will have a major bearing on the airlines’ cost structure. Average ATF prices stood at Rs. 1,03,499/KL in FY2024, which was lower by 14 per cent than Rs. 1,21,013/KL in FY2023, but significantly higher by 58 per cent than the pre-Covid levels of Rs. 65,368/KL in FY2020. In April 2024, ATF prices remained range-bound sequentially, but were higher by 3.1 per cent on a yearly basis. Fuel cost accounts for 30-40 per cent of the airlines’ expenses, while 45-60 per cent of the operating expenses—including aircraft lease payments, fuel expenses and a significant portion of aircraft and engine maintenance expenses—are denominated in dollar terms.

The industry reported a net loss of Rs. 170-175 billion in FY2023 and it is further expected to reduce significantly to Rs. 30-40 billion in FY2024 and FY2025.

The industry has been facing supply chain challenges and issues of engine failures for the Pratt and Whitney (P&W) engines. In FY24, Go Airlines grounded half of its fleet due to faulty P&W engines, and IndiGo had also grounded more than 70 aircraft due to P&W engine issues, as on February 2, 2024.