Domestic air traffic is likely to return to pre-COVID-19 levels by financial year 2023 and international air traffic by 2024, according to a forecast by rating agency ICRA.
It says that the domestic passenger traffic had shown a gradual recovery supported by an increase in aircraft capacity permitted by the Union government, while international traffic continued to remain subdued on account of travel restrictions. As a result, domestic passenger traffic reached 61%, and international traffic 23% of pre-COVID-19 level in January.
On the cargo front, recovery had been faster with volumes reaching 89% of the previous year’s level in January 2021. Domestic cargo volumes reached 91% and international 88% of the previous year. The cargo volumes are likely to reach pre-COVID-19 levels in fiscal 2022 and register a growth of 36% after a contraction of 25% in FY2021.
Airports, too, took a 60% hit to their incomes following a drop in traffic, resulting in operating losses at 32%. With recovery in air traffic, they are likely to see their earnings before interest (EBITDA) recover by 85% in financial year 2022, which will be lower than financial year 2019-2020 levels, says ICRA.
“While the EBIDTA is expected to improve in FY2022, it is likely to remain moderate at 18%, when compared to historic levels of around 40%,” said Ms. Anupama Arora, vice- president, ICRA.
