August 11, 2021

Recovery Seen In Domestic Air Passenger Traffic In July: Indian Credit Rating Agency

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NEW DELHI — The Indian domestic air passenger traffic grew 56 percent at about 4.8 million in July compared to 3.1 million in June as Covid-19 infection trajectory declined, Indian rating agency ICRA said on Aug. 5. 

The airlines’ capacity deployment for July was 90 percent higher than July 2020 (47,200 departures in July 2021 against 24,770 departures in July 2020).

On a sequential basis, the number of departures in July was higher by 49 percent as Covid-19 infections demonstrated a downward trajectory, the agency said.

The average daily departures for July were at 1,500, significantly higher than the average daily departures of 800 in July 2020, and higher than 1,100 in June 2021, though it remains at lower than 2,000 in April, said Kinjal Shah, Vice President and Co-Group Head at ICRA, said for July 2021.

“While some airlines have sufficient liquidity and/or financial support from a strong parent, which is likely to help them sustain over the near term, for others, the credit metrics and liquidity profile have deteriorated,” ICRA said in a report

“Many have already undertaken several cost rationalization measures, including salary cuts for their employees, leave-without-pay options, and laying off pilots and crew members to cut costs. Some airlines have also sought deferment in their lease rental payments.”

The airlines also said that some airlines have also entered into sale and leaseback transactions to shore up liquidity in the near term.

The average number of passengers per flight during July 2021 was 104 against an average of 98 passengers per flight in June 2021.

“Though the recovery continued in July 2021, there is continued stress on demand,” said Shah. 

“This demand is driven largely by the second wave of the pandemic, limiting travel to only necessary travel, while both leisure and business travel have been curtailed due to various state-wide restrictions, despite the decline in infections.”

While the scheduled international operations have been suspended further till Aug. 31, under the Vande Bharat Mission (VBM) for evacuation of Indian citizens from foreign countries, which started from May 7, 2020, the international passenger traffic (inbound and outbound) for Indian carriers has been 3.9 million for the period May 7, 2020, to July 31, 2021.

For July 2021, the international passenger traffic for Indian carriers under the Vande Bharat Mission was estimated at 2.1 lakh, a sequential growth of 43 percent. 

The Indian passenger traffic was around 115.37 million in FY21 for the month of May, as per a report by the Indian Brand Equity Foundation. There was a 61.7 percent year-on-year decline in domestic traffic while an 84.8 percent year-on-year decline in international traffic in FY21, as per the report.

(With inputs from ANI)

Edited by Abinaya Vijayaraghavan and Praveen Pramod Tewari



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