Chennai: In the first eight months of the fiscal domestic passenger traffic grew by 17 per cent and is expected to grow by up to 13 per cent in FY24.
ICRA estimates that the domestic air passenger traffic will grow by 8-13 per cent in FY2024 to 150-155 million and surpass the pre-Covid levels of 141.2 million in FY20. The momentum is expected to continue in FY25 as well with a similar estimated growth, aided by rising demand for air travel and improving airport infrastructure.
During eight months of FY24, domestic air passenger traffic stood at 100.7 million, witnessing a growth of 17 per cent, and 5 per cent higher than the pre-Covid levels (8M FY2020) of 95.7 million. Further, the international passenger traffic for Indian carriers, at 23.9 million in FY2023, surpassed the pre-Covid levels, although it trailed the peak levels of 25.9 million in FY19. The same is expected to cross this level in the current fiscal, with an estimated 25-27 million passengers.
Aviation’s industry’s net loss is expected to shrink to Rs 3000 -5000 crore in FY24 from an estimated Rs 17000 -17500 crore in FY2023 aided by improved yields and stable cost environment.
“The air passenger traffic momentum witnessed in the current fiscal is expected to continue in FY2025, though further expansion in yields from the current levels may be limited. Thus, the industry is estimated to report a similar net loss of Rs. 3000-5000 crore in FY2025 as well,” said Suprio Banerjee, Vice President & Sector Head – Corporate Ratings, ICRA. Despite a healthy recovery in passenger traffic and improvement in yields, the movement of the latter will remain monitorable amidst elevated ATF prices and depreciation of the rupee against US dollar compared to pre-Covid levels, both of which have a major bearing on the airlines’ cost structure.
The average ATF prices stood at Rs. 103,189/KL in 9M FY2024, 59% higher compared to an average of Rs. 64,715/kl during FY20, albeit a decline of 17 per cent compared to Rs. 121,013 /kl in FY2023.
