Rising aviation turbine fuel (ATF) prices are emerging as a major threat to the recovery process due to the ongoing geopolitical issues associated with the Russia-Ukraine conflict.
Highlight
- Domestic air passenger traffic is projected to grow by 83 percent
- Indian carriers carried around 11 million passengers in April 2019
- For April 2022, the average daily departures were around 2,726, a significant increase over the previous year
ICRA said domestic air passenger traffic registered 83 per cent year-on-year growth at 10.5 million in April as cases of Covid-19 infection reduced, a difference of only 5 per cent compared to pre-pandemic levels Is. on Monday.
The Indian carrier carried around 11 million passengers in April 2019. While domestic airline operators saw international passenger traffic surpassing the pre-pandemic numbers (about 1.83 million), the total volume stood at around 1.85 million, it said. It also noted that rising aviation turbine fuel (ATF) prices are emerging as a major threat to the recovery process due to the ongoing geopolitical issues associated with the Russia-Ukraine conflict.
For April 2022, the average daily departures stood at around 2,726, notably higher than the average daily departures of around 2,000 in the same month a year ago and around 2,588 in March 2022, Vice President and Sector Head Supriyo Banerjee said. , Icra. According to him, the average number of passengers per flight during the last month of April was 128, as compared to 133 passengers per flight in March 2022 and lower than the average of 135 passengers per flight in April 2019.
Banerjee said, “However, given the normalcy seen in domestic airline operations, the recovery in passenger traffic in FY2023 is expected to be at a relatively faster pace, considering any further COVID wave looms over the sector. ” Enhanced ATF Prices Geo- He said political issues will remain a near-term challenge for the industry and will continue to impact the profitability of Indian carriers.
The ICRA said the ATF prices have increased by about 89 per cent year-on-year in the current month due to the rise in crude oil prices due to geopolitical issues arising out of the Russian invasion of Ukraine. Rising ATF prices will pose a serious threat to the earnings of the industry in FY2023, it said, adding that overall, a return to normalcy will lead to an improvement in passenger load factors, which in turn will aid revenues. However, the increased ATF prices will continue to impact the earnings of Indian carriers in FY2023, it said.
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