The momentum in air passenger traffic witnessed in FY2024 is expected to continue into FY2025, ICRA said. File. Image for representation.
| Photo Credit: The Hindu

Domestic air passenger traffic grew 5.1% year-on-year to an estimated 138.9 million in May and was significantly higher by around 14 per cent than pre-COVID levels, credit ratings agency ICRA said on Thursday.

ICRA also said the outlook on the Indian aviation industry is stable amid the continued recovery in domestic and international air passenger traffic with a relatively stable cost environment and expectations of the trend continuing in FY2025.

The airlines’ capacity deployment in the previous month increased 6% year-on-year and about 2% higher than April 2024, it added.

According to the agency, the domestic air passenger traffic for FY24 was around 154 million, with a year-on-year growth of around 13%.

It thus surpassed the pre-COVID levels of around 142 million in FY2020, the ratings agency said, adding that the international passenger traffic for Indian carriers stood at around 29.68 million last fiscal, registering a year-on-year growth of around 24%.

Moreover, the industry witnessed improved pricing power, reflected in the higher yields (over pre-Covid levels), it said.

The momentum in air passenger traffic witnessed in FY2024 is expected to continue into FY2025. However, further expansion in yields from the current levels may be limited, it added.

Average ATF price stood at ₹103,499/KL in FY2024, 14% lower than ₹121,013/KL in FY2023 but significantly higher by 58% than the pre-COVID levels of ₹65,368/KL in FY2020, according to ICRA.

In Q1 FY2025, the average ATF price remained higher by 5.4% on a year-on-year basis. In June 2024, it declined by 6.5% sequentially, the agency said.

Fuel cost accounts for around 30-40% of airlines’ expenses.

Around 45-60% of the operating expenses, including aircraft lease payments, fuel expenses and a significant portion of aircraft and engine maintenance expenses, are denominated in dollar terms.

Some airlines have foreign currency debt. While domestic airlines have a partial natural hedge to the extent of their earnings from international operations, overall, their net payables are in foreign currency, it said, adding that the airlines’ efforts to ensure fare hikes, proportionate to their input cost increases, will be the key to expanding their profitability margins.

The pace of recovery in industry earnings is likely to be gradual owing to the high fixed-cost nature of the business, the agency noted.

The industry reported a net loss of around ₹170-175 billion in FY2023 due to elevated ATF prices, along with the depreciation of the rupee against the U.S. dollar, it added.

ICRA expects the Indian aviation industry to report a similar net loss of around ₹30-40 billion in FY2025 as seen in FY2024, which is significantly lower from levels of around ₹170-175 billion in FY2023, as airlines continue to witness healthy passenger traffic growth and maintain pricing discipline.

Over 76,000 passengers of budget carrier IndiGo were affected due to the airline cancelling its flights or delaying them by more than two hours in September, while Tata-owned Air India denied boarding to 450 passengers during the month, DGCA data revealed on Thursday.

According to the data, India’s domestic air passenger traffic grew 29.10 percent at 1.22 crore in September, against 1.03 crore in the same month of the last year, with IndiGo commanding a whopping 63.4 percent of the total traffic.

Of the total 76,612 total passengers affected, 50,945 passengers were affected after IndiGo cancelled its flights altogether in September, while another 25,667 passengers were affected due to the Gurugram-based budget airline delaying its flights by more than two hours during the month, according to data.

At the same time, while it provided alternative flights and full refunds to the passengers affected by flight cancellations, the airline served only refreshments to the passengers for the delayed (by more than two hours) flights, The Directorate General of Civil Aviation (DGCA) data revealed.

Significantly, as many as 46 of its 334 aircraft are currently on the ground owing to various supply chain issues as of date, as per the aircraft fleet tracking website Planespotters.

Besides IndiGo, 24,758 passengers of Air India and another 24,635 passengers of SpiceJet were affected on account of their airlines delaying some of their flights by more than two hours in September, as per data.

However, Air India offered them flights on other airlines, served them refreshment and lunch and spent Rs 5.27 lakh on facilitation, as part of mitigating efforts.

SpiceJet on its part, spent Rs 45.78 lakh on facilitation of passengers besides providing them alternative flights and refreshments, according to DGCA.

Meanwhile, maintaining its leadership in the domestic air passenger traffic, IndiGo flew 77.70 lakh passengers during September, followed by Vistara (12.29 lakh passengers), Air India (11.97-lakh passengers), respectively.

Vistara and Air India had a market share of 10 per cent and 9.8 per cent, respectively, during the previous month, as per DGCA data.

Air India subsidiary AirAsia India, which has now become AiX Connect, transported 8.16 lakh passengers with a 6.7 per cent market share.

The two other no-frills carriers — SpiceJet and Akasa Air, carried 5.45 lakh and 5.17-lakh passengers on their flights, respectively, with a market share of 4.4 per cent and 4.2 per cent, during September, as per DGCA data.

IndiGo delivered the highest on-time performance at 83.6 per cent from four key airports — Delhi, Mumbai, Bengaluru and Hyderabad — in the previous month, while Vistara had 92 per cent load factor on its planes, the highest among all domestic airlines during the month, the DGCA data showed. 

Image used for representational purpose only.
| Photo Credit: The Hindu

India’s domestic air passenger traffic volume surged 25% year-on-year to 1.21 crore passengers in July, according to DGCA data released on Monday (August 14).

The data from the Directorate General of Civil Aviation (DGCA) showed that domestic carriers flew 97.05 lakh passengers in July 2022.

No-frills carrier IndiGo carried 76.75 lakh passengers, cornering a market share of 63.4% during the reporting month.

Tata Group-owned Air India stood a distant second with the airline flying a total of 11.98 lakh passengers in July. It had a market share of 9.9% for the month.

Vistara, which is a 51:49 joint venture between Tata Sons and Singapore Airlines, flew 10.20 lakh passengers on domestic routes in the previous month with a market share of 8.4%, as per data.

Air India’s subsidiary AirAsia India, which is now known as AIX Connect, saw 9.01 lakh passengers flying on the intra-country routes and accounted for 7.5% of the total traffic during the reporting month.

Akasa Air, which completed one year of its operations on 7th of this month once again flew more passengers than the established carrier SpiceJet at 6.24 lakh passengers in July with a market share of 5.2%, according to DGCA data.

Struggling carrier SpiceJet transported 5.04 lakh passengers during July and had to contend with 4.2% market share. The Gurugram-based airline, however, delivered the highest load factor at 88.9% in July over June, as per data.

IndiGo also clocked the highest on-time performance for July with 86.8% of its flights on an average departing or arriving on time at the four key airports- Delhi, Mumbai, Bangalore and Hyderabad, as per DGCA data.