According to the credit rating agency ICRA, the domestic air passenger traffic grew by 15-16% at around 104-105 lakhs in November 2021. There is also a year-on-year growth of 64%. About 80,750 flight departures happened in November 2021, against 54,132 departures in November 2020. On a sequential basis, the number of departures in November 2021 was higher by 12%, as COVID-19 infections demonstrated a downward trajectory.
For November 2021, the average daily departures stood at 2,700, significantly higher than the average daily departures of 1806 in November 2020. In October, the average daily departure was recorded at 2400.
During the surge of the second wave of the pandemic, in June 2021, the Ministry of Civil Aviation (MoCA) had reduced the permissible capacity of airlines to 50%. It had subsequently increased the permitted capacity to 72.5% in August 2021, increasing the capacity further to 85% with effect from September 2021. MoCA restored the capacity to 100% recently in October 2021. The change has been reflected in the number of passengers travelled.
The average number of passengers per flight during November 2021 was close to 129, against an average of 125 passengers per flight in October 2021.
Omicron can slowdown the industry
“The threat of new COVID-19 variant Omicron has the potential to derail the domestic recovery if it becomes a source of a fresh round of lockdowns/restrictions in the near term,” said Suprio Banerjee, Vice President & Sector Head, ICRA.
The Director-General of Civil Aviation (DGCA) had earlier resumed the operations of scheduled international operations from December 15, according to a circular released on November 26. However, this has been put on hold till further notice, given the threat of the recent emergence of new variants of COVID-19 Omicron.
The international inbound and outbound passenger traffic for Indian carriers stood at 57 lakhs from May 07, 2020, to November 30, 2021. These were primarily the flights under the Vande Bharat Mission (VBM) to evacuate Indian citizens from foreign countries. For November 2021, international passenger traffic for Indian carriers under the VBM was estimated at 6.1 lakhs, showing a sequential growth of 15%.
Aviation Turbine Fuel price rise is a concern
According to ICRA, one primary concern that worries the aviation sector is the aviation turbine fuel (ATF) prices. It has shown a sharp increase of 67.3% on a Y-o-Y basis till December 2021, primarily due to the rise in crude oil prices. The rising aviation turbine fuel charges, coupled with relatively low capacity utilisation of the aircraft fleet, will continue to hinder the financial performance of Indian carriers in FY2022. “Furthermore, the credit profile of most Indian carriers continues to be characterised by a weak liquidity position,” ICRA added.