Hyderabad: Hyderabad’s Rajiv Gandhi International Airport (RGIA), operated by GMR Hyderabad International Airport Ltd (GHIAL), expects passenger traffic to stay unchanged from last year, as domestic traffic drops owing to rising airfares.

International passengers are expected to make up for a decline in domestic passengers as more airlines start flying out of Hyderabad, GHIAL chief executive Vikram Jaisinghani said at the launch of Cathay Pacific’s flight from Hyderabad to Hong Kong.

The domestic aviation industry has seen a decline in passenger traffic as financially stricken Kingfisher Airlines Ltd has cut flights, operating less than 100 a day from 365 a year ago and Air India was hit by a strike.

High aviation fuel prices have contributed to the burden on carriers and passengers—jet fuel accounts for about 40% of an airline’s operating cost. The price of aviation turbine fuel (ATF) was raised by 3.2% on 16 August for the third consecutive time since July, more than offsetting the price reductions in May and June.

“The aviation industry is suffering (from) very high cost of fuel," said Tom Wright, general manager, South Asia, Middle East and Africa, Cathay Pacific Airways Ltd. The airline reported losses (of 935 million Hong Kong dollars) for the first six months of the year mainly on account of high jet fuel prices.

“We do need to see fuel price come down. I think it is the most significant issue." Jaisinghani said. As far as domestic passenger traffic is concerned, “a lot will depend on the fuel price movement," he said. “Indian market is a price-sensitive market," Jaisinghani said. “The impact is being seen. It is not only in Hyderabad, it is pan-India."

Domestic passenger traffic in the first half of the year is in the “low single digits at this point of time," Jaisinghani said. GHIAL expects domestic passenger traffic to pick up in the latter part of the year.

International traffic is expected to pick up with the start of new services from Hyderabad.

“Though demand continues to be soft, we believe there will be modest growth in domestic traffic," said Kapil Kaul, CEO, South Asia, Centre for Asia Pacific Aviation. International passenger traffic is expected to be in the range of 8-10% mainly driven by short haul regional international operations, he said.

Cathay Pacific announced a four-times-a-week service between Hyderabad and Hong Kong from 1 December.

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