Despite festival demand last month, air traveller count failed to match pre-COVID-19 levels and remained behind by 8%.
Domestic passenger traffic for October 2022 is estimated to be at 114 lakh, according to ratings agency ICRA. This figure is 10% more than the figure of 103 lakh seen in September and 26% more than in October 2021. However, it is still short of the level seen in October 2019 by 8%, ICRA noted.
For the seven-month period of FY23 (April-October 2022), domestic passenger traffic is estimated to be at 740 lakh, which is a year-on-year growth of 91%. Though this figure is lower by 11% compared to April-October 2019 (pre-COVID levels).
Supply-chain issues had resulted in delays in delivery of aircraft as well as engines (forcing the grounding of aircraft) and in airlines deploying 11% less aircraft seats compared with pre-COVID levels, according to ICRA. As a result, though demand was lower, planes were as full as earlier, as the passenger load factor (seats sold per aircraft) in both October 2019 and October 2022 were at 84%.
Though passengers are dealing with higher fares as airlines try to improve yields, ICRA noted that airlines were unable to offset the impact of the rising ATF price which, in November 2022, is higher by 47% on a year-on-year basis.
“The earnings recovery for domestic airlines will be slow-paced due to elevated ATF prices in addition to the rupee depreciation against the dollar amid a heightened competitive environment,” said Suprio Banerjee, vice-president & sector head - Corporate Ratings, ICRA.