Domestic air passenger traffic touched 1.25 crore in January: Icra
Domestic air passenger traffic in India touche 1.25 crore in January this year, an increase of 96 per cent compared to the year-ago period, according to rating agency Icra. Although the traffic remained around 2 per cent lower compared to the pre-Covid levels in January 2020, Icra maintained a negative outlook on the Indian aviation industry.
The rating agency noted that the net loss in FY2023 is expected to be notably lower compared to Rs 235 billion (RS 23,500 crore) net loss in FY2022, primarily due to recovery in passenger traffic, fare hikes, and lower interest burden.
In January this year, airlines’ capacity deployment was higher by around 42 per cent than January 2022, while it was lower by about 6 per cent than the pre-Covid levels. The industry’s financial performance, however, is likely to remain under pressure in the near term due to the elevated Aviation Turbine Fuel (ATF) prices and the depreciation of the Indian rupee against the US dollar. Jet fuel prices in February 2023 were higher by around 32 per cent on a year-on-year basis, and the airlines’ efforts to ensure fare hikes proportionate to their input cost increases will be key to expanding their profitability margins, Icra said.
For the aviation industry to make a full recovery, airlines must be able to ensure fare hikes proportionate to their increased input costs. This is essential for airlines to expand their profitability margins and to make the industry more sustainable. It is encouraging to see the progress made in domestic air passenger traffic in the last few months, and we hope that the industry can continue to recover at a steady rate.
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