Foreign fliers on Indian airlines in May outnumber pre-Covid levels: ICRA

Credit rating agency ICRA on June 7 said that the international passenger traffic for Indian carriers in May 2022 surged to 2.2 millions, which is higher than the number of people travelled before the pandemic, after the resumption of scheduled international operations since March 27.

Indian airlines carried 24 percent more international passengers in May 2022, compared to May 2019, ICRA said in its report.

However, domestic air traffic in May 2022 was 7 percent lower than pre-Covid levels, compared to May 2019. For May 2022, domestic passenger traffic in India is estimated at 11.4 million, ICRA said.

The airlines’ capacity deployment for May 2022 was 2.1 times higher than in May 2021 as there were 86,289 departures in May 2022 as against 27,725 departures in May 2021.

On a sequential basis, the number of departures in May 2022 was higher by around 6 percent when compared to April 2022, given the near normalcy seen in business operations, ICRA said.

"Though recovery in passenger traffic is expected to be relatively fast-paced in 2022-23, given the near normalcy situation seen in domestic airline operations, the overhang of any further Covid wave looms on the sector," Suprio Banerjee, Vice President and Sector Head at ICRA, said.

ICRA in its report also said that the yields for domestic routes have moved up at an average of 18-20 percent over the past 12 months due to rising aviation turbine fuel prices.

The rating agency added that the recovery of India's aviation industry may also take a hit due to rising prices of ATF.

"Elevated ATF prices aggravated by geo-political issues will remain a near-term challenge for the industry and will continue to weigh on the profitability of Indian carriers," Banerjee said.

On June 6, ICRA had revised upward its projection of international air passenger traffic at Indian airports at 80-85 percent of the pre-pandemic volumes during 2022-23.

The volume of such travellers has touched 72 percent of the pre-Covid level in May, ICRA said. Major destinations driving the international traffic demand are Southeast Asia, the Middle East and Europe, the rating agency said.

ICRA said it also expects the ramp-up in the overall passenger traffic to 96-97 percent of the pre-Covid levels in 2022-23 on the back of a strong and sharp recovery in domestic passenger traffic and the resumption of international commercial operations.