India’s domestic air passenger traffic is showing signs of sharp recovery amid a fall in new Covid-19 cases and the ongoing festive season. (Scheduled international flights have been suspended since March last year.
According to credit rating agency ICRA, domestic air passenger traffic was 8.8 million passengers in October, up nearly 67% from the same period last year. In October 2020 it was 5.2 million, Press Trust of India reports.
The airlines operated 72,000 flights this October, as against 49,150 last year.
On a sequential basis, the growth was nearly 25% as the passenger traffic was nearly 7.1 million in September. The number of departures in October 2021 was higher by around 18% than in September.
The Indian government has allowed the airlines to operate at 100% capacity from October 18, as Covid-19 infections have tapered off in most parts of the country, barring a few states. It had imposed a cap of 51% from June 1 onwards with the resurgence of the second wave of the pandemic that had wreaked havoc across the country.
With more people getting vaccinated, the passengers no longer appear to be apprehensive about air travel. However, airline companies are worried about rising fuel costs as global crude oil prices continue to rise.
While declaring its September quarter results, India’s largest airline by market share, IndiGo, had said its fuel costs soared 207.8% against the year-ago period.
On the other hand, India is a very price-sensitive market and airlines have little room to raise the fares.
When the domestic flights resumed on May 25 last year after a two-month-long nationwide lockdown, the government had imposed lower and upper limits in pricing. The lower caps were imposed to help the airlines that have been struggling financially due to coronavirus-related travel restrictions. The upper caps were imposed so that passengers are not charged huge amounts when the demand for seats is high. These fares were revised upwards in August.
In September, the government halved the price cap period from 30 days to 15. Hence the airlines need not follow these limits for passenger ticket bookings made more than 15 days before the travel date.