India’s domestic air traffic is showing signs of consistent growth with the waning of the Covid-19 pandemic in most parts of the country and higher capacity deployment.
According to credit rating agency ICRA, domestic air passenger traffic in August grew 31% to 6.6 million over the previous month (5.1 million). However, the agency said demand continues to be low-key as passengers are boarding flights mainly for necessary travel, the Press Trust of India reported.
The airlines’ capacity deployment for August 2021 (57,500 departures) was higher than the previous month by about 22%. On a year-to-year basis, it was nearly double the 28,834 departures in August last year.
The average daily departure numbers in August this year was about 1,900, higher than the 1,500 in July and more than double in August last year (900). However, it remains lower than the 2,000 in April this year, before the country came under the grip of the second wave of Covid-19.
The average number of passengers per flight during August rose to 114, from 106 in July, the report added.
Last year the Indian government suspended all flights for two months to prevent the spread of the coronavirus. On May 25, 2020, it allowed the resumption of domestic flights, while scheduled international flights continue to remain suspended.
Initially, the Civil Aviation Ministry permitted a capacity deployment of 33% on domestic routes, and it later scaled it up to 80% in December last year. But when the second wave of Covid-19 started wreaking havoc, the ministry brought it down to 50% in June, which was later increased to 65% in July.
The ministry has also increased the minimum and maximum fare band by 10-13% for domestic flights with effect from August 12-31.
“In ICRA’s view, the price increase may not materially impact the passenger traffic demand as in the current scenario, travel is limited to only necessary travel while both leisure and business travel has been curtailed due to various state-wide restrictions and the spread of the infections.
“However, it will allow airlines to recoup some part of the increase in jet fuel prices, thereby cushioning some impact on the airlines’ losses,” it stated.
As for scheduled international flights, the government has extended the ban from time to time. In the latest move, it was extended till September 30.
Meanwhile, India has now entered into a bilateral air bubble arrangement with 28 countries, including the US, UK, UAE, Kenya, Bhutan and France.
The continued curbs on air travel have affected the country’s aviation sector, including airlines, airports and related services. According to official data, Indian airlines and airports incurred financial losses of 224 billion rupees ($3.06 billion) in the last financial year amid the coronavirus pandemic.
Nearly 75% of airports operated by the Airports Authority of India are incurring losses. Also, AAI’s revenue came down to 8.89 billion rupees during the April-June period this year, from 29.76 billion rupees during April-June 2019.