Domestic Air Passenger Traffic in India Down By 43 Pct After Third Wave of Covid-19

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The third wave of Covid, with the resulting controls, saw a sharp decline of 42-43 percent in domestic air passenger traffic, the rating agency ICRA said.

Accordingly, 64 lakh passengers were carried in January 2022 as compared to 112 lakh in December 2021. Also, these figures show an annual decline of 17%, as passenger traffic in January 2021 was 77 million.

In addition, the airline’s capacity deployment for January 2022 was about 7 percent lower than in January 2021.

Gradually, the number of departures in January 2022 was 27 percent lower due to the emergence of the new Covid-19 variant.

Supraio Banerjee, Vice President and Sector Head, ICRA, said: “The gradual recovery in January 2022 was marked by the emergence of new variants (Omicron) and the current declining demand in the corporate travel segment, with restrictions affecting the leisure travel segment.

This is reflected in the fact that passenger traffic for the 10M FY2022 was 45% lower than the 10M FY2020 (pre-covid level). The emergence of a new Covid variant and reactive air travel restrictions will weigh down the prospects for the domestic airline sector in the current quarter. “

In addition, ICRA noted that the main concern for the aviation sector is the price of aviation turbine fuel (ATF), which has seen a sharp rise of 59.9 per cent year-on-year till February 2022.

“This is mainly due to the rise in crude oil prices. This will continue to weigh on the financial performance of Indian carriers in FY2022, with the relatively low capacity utilization of aircraft fleets,” the rating agency said.

“Furthermore, the credit profile of most Indian carriers is characterized by a weak liquidity position.”

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