It also expects elevated Aviation Turbine Fuel prices, aggravated by geo-political issues, to remain a near-term challenge for the industry and will be a key determinant of profitability for the sector.
India's domestic air passenger traffic is estimated to have grown by around 59 per cent year-on-year to 84 million in FY22, although it is still about 40 per cent lower as compared to the pre-pandemic level, credit ratings agency Icra said on Monday.
It also expects elevated Aviation Turbine Fuel (ATF) prices, aggravated by geo-political issues, to remain a near-term challenge for the industry and will be a key determinant of profitability for the sector.
On a sequential basis, domestic passenger traffic spiked about 37 per cent to 10.6 million in March, driven by a near to normalcy in airline operations owing to waning of impact of the pandemic, Icra said.
The passenger traffic on local air routes was 7.7 million in February 2022, it added.
Traffic growth in March this year stood at 35 per cent as compared to over 7.8 million in the year-ago month, it said.
Airlines' capacity deployment for March 2022 registered a growth of 12 per cent at 80,217 departures as compared to over 71,548 departures clocked in the same month of last year, ICRA said.
Domestic departures logged 42 per cent growth in March this year over the previous month, driven by increased pace of vaccination and rapid abatement of the third wave of COVID-19, which allowed for quick lifting of travel restrictions, the ratings agency said.
"Domestic passenger traffic for FY2022 is estimated at around 84 million, y-o-y growth of 59 per cent, marginally higher than our estimate of 80-82 million, although it is around 40 per cent lower than pre-COVID levels,” Vice President and Sector Head of Icra Suprio Banerjee said.
For March this year, the average daily departures were at around 2,588, higher than the average daily departures of around 2,308 in March 2021, and notably higher compared to around 2,023 in February 2022, he said.
The average number of passengers per flight during March this year was at 132, against an average of 135 passengers per flight in February, Banerjee said.
According to Icra, one major positive development is resumption of scheduled international operations from March 27 after a hiatus of almost two years.
ATF prices have surged by around 93 per cent year-on-year in April this year, given the elevated crude oil prices, geo-political issues arising from Russian-Ukraine war, the ratings agency said.
The rising ATF prices continue to play a spoilsport for the industry and will pose a serious threat to the sector's earnings in FY23, it said.