Highlight
- In this fiscal year, traffic volumes are expected to recover to pre-pandemic levels
- This means a strong growth of 75 per cent over FY22 levels.
- Between FY 2015 and 2020, air traffic registered a healthy compound annual growth rate of around 12%
A report on Monday said air passenger traffic volumes are expected to recover to pre-pandemic levels, a strong 75 per cent year-on-year growth in this fiscal.
Domestic credit rating agency Crisil in its report said the increase in traffic volume is expected to be on account of domestic traffic as slots and routes on the international front are still opening up.
It also said that airport operators expect their traffic volumes to recover to pre-pandemic (Financial 2020) levels this fiscal, leading to improved revenues, supported by an increase in tariffs.
In FY23, the impact of the pandemic appears to be behind us, with air traffic volumes expected to rise to around 340 million passengers in FY20.
In the first five months (till August), volumes were around 88 per cent of the corresponding FY20 levels, but are expected to pick up in the remaining months of the year on the back of improving business travel sentiment, improving demand. Capacity availability constraints on the international segment and aircraft and international slots, it said.
“In the first five months of this fiscal, domestic traffic stood at 92 per cent of the corresponding FY20 mark, while international traffic was at 75 per cent. This reinforces our confidence for healthy volume growth and a near return in the current financial year. – Double-digit growth in the next financial year,” said Manish Gupta, senior director, Crisil Ratings.
He added that in this financial year, traffic volumes are expected to recover to pre-pandemic levels, which is a strong growth of 75 per cent over FY22 levels.
The report said revenue recovery is critical to support the growing debt-servicing requirements as private airports are at the end of their expansion phase.
Between FY 2015 and 2020, air traffic registered a healthy compound annual growth rate of around 12 per cent, driven by increased penetration of air travel beyond metro cities on tailwinds from government schemes such as RCS and UDAN 1 and infrastructure. Focuses on the development of the framework, as per the report.
Then the pandemic hit, and air traffic volumes were nosedive in fiscal year 2021. According to Crisil, fiscal 2022 saw only a partial recovery (55 per cent of FY20 traffic), with multiple waves of infections and restrictions on the movement of people. ,
It also said that the aeronautical charges for the top four private airports have increased by about 30 per cent, which will help in reaching 120 per cent of the aeronautical revenue in FY13.
The agency said air traffic recovery estimates and revenue projections are sensitive to macroeconomic uncertainties and geopolitical developments.
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