MUMBAI: Domestic air passenger traffic was estimated at about 133 lakh for the month of August, which was roughly 2.3% greater than the 130 lakh recorded in July, mentioned credit standing company ICRA in its month-to-month report launched on Wednesday.
Passenger traffic grew by about 7% on a year-over-year foundation in the domestic sector, which was notably greater by about 12.7% in comparison with pre-Covid ranges registered in August 2019, it added.Airlines’ capability deployment in August was greater than in August 2023 by about 6.8%, and in addition greater by about 2.3% in comparison with July 2024.
In the 5 months from April to August 2024, domestic air passenger traffic totaled about 665 lakh, with a year-over-year growth of roughly 5.3%. Further, for the primary 4 months of FY2025, the worldwide passenger traffic for Indian carriers stood at about 108 lakh, displaying a year-over-year growth of 15.8%, which is 49.3% greater than the pre-Covid stage of 72.4 lakh.
The outlook for the Indian aviation business stays steady, pushed by expectations of average growth in domestic air passenger traffic and a comparatively steady value surroundings in FY2025, ICRA mentioned. “Moreover, the industry witnessed improved pricing power, reflected in the higher yields (over pre-Covid levels) and, thus, the revenue per available seat kilometer–cost per available seat kilometer (RASK–CASK) spread of the airlines. The momentum in air passenger traffic observed in FY2024 is likely to marginally taper to 7-10% in FY2025 (compared to 13% in FY2024), pegged lower than ICRA’s earlier estimate of 8-13%, given the high base of FY2024 and lower passenger traffic in Q1 FY2025, impacted by severe heat waves and other weather-related disruptions,” it mentioned.
“Yields are also likely to be under pressure, as airlines strive to maintain adequate passenger load factor (PLF) amidst elevated aviation turbine fuel (ATF) prices. International passenger traffic for Indian carriers is expected to grow by 15-20% in FY2025 and FY2026 each,” it added.
ATF costs in H1 FY2025 remained steady on a year-over-year foundation however considerably elevated over pre-Covid ranges. (*2*) ICRA famous.
The common ATF value stood at Rs. 103,499/KL in FY2024, decrease by 14% than Rs. 121,013/KL in FY2023. In H1 FY2025, the common ATF value was Rs. 98,485/KL, related on a year-over-year foundation; nonetheless, it was greater by 51% in comparison with the pre-Covid stage. Fuel prices account for about 30-40% of the airways’ bills, whereas about 45-60% of the working bills—together with plane lease funds, gasoline bills, and a good portion of plane and engine upkeep bills—are denominated in greenback phrases. Furthermore, some airways have overseas foreign money 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. The airlines’ efforts to ensure fare hikes, proportional to their input cost increases, will be key to expanding their profitability margins,” it said.
Passenger traffic grew by about 7% on a year-over-year foundation in the domestic sector, which was notably greater by about 12.7% in comparison with pre-Covid ranges registered in August 2019, it added.Airlines’ capability deployment in August was greater than in August 2023 by about 6.8%, and in addition greater by about 2.3% in comparison with July 2024.
In the 5 months from April to August 2024, domestic air passenger traffic totaled about 665 lakh, with a year-over-year growth of roughly 5.3%. Further, for the primary 4 months of FY2025, the worldwide passenger traffic for Indian carriers stood at about 108 lakh, displaying a year-over-year growth of 15.8%, which is 49.3% greater than the pre-Covid stage of 72.4 lakh.
The outlook for the Indian aviation business stays steady, pushed by expectations of average growth in domestic air passenger traffic and a comparatively steady value surroundings in FY2025, ICRA mentioned. “Moreover, the industry witnessed improved pricing power, reflected in the higher yields (over pre-Covid levels) and, thus, the revenue per available seat kilometer–cost per available seat kilometer (RASK–CASK) spread of the airlines. The momentum in air passenger traffic observed in FY2024 is likely to marginally taper to 7-10% in FY2025 (compared to 13% in FY2024), pegged lower than ICRA’s earlier estimate of 8-13%, given the high base of FY2024 and lower passenger traffic in Q1 FY2025, impacted by severe heat waves and other weather-related disruptions,” it mentioned.
“Yields are also likely to be under pressure, as airlines strive to maintain adequate passenger load factor (PLF) amidst elevated aviation turbine fuel (ATF) prices. International passenger traffic for Indian carriers is expected to grow by 15-20% in FY2025 and FY2026 each,” it added.
ATF costs in H1 FY2025 remained steady on a year-over-year foundation however considerably elevated over pre-Covid ranges. (*2*) ICRA famous.
The common ATF value stood at Rs. 103,499/KL in FY2024, decrease by 14% than Rs. 121,013/KL in FY2023. In H1 FY2025, the common ATF value was Rs. 98,485/KL, related on a year-over-year foundation; nonetheless, it was greater by 51% in comparison with the pre-Covid stage. Fuel prices account for about 30-40% of the airways’ bills, whereas about 45-60% of the working bills—together with plane lease funds, gasoline bills, and a good portion of plane and engine upkeep bills—are denominated in greenback phrases. Furthermore, some airways have overseas foreign money 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. The airlines’ efforts to ensure fare hikes, proportional to their input cost increases, will be key to expanding their profitability margins,” it said.
