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India’s air passenger traffic is expected to rebound in the next fiscal year though it will widely lag the levels seen in FY16, credit rating agency Icra said in a statement on Monday.

“Owing to the low base of FY2021, rising leisure travel and gradual opening up of corporate offices, FY2022 will witness a robust YoY (year-on-year) growth of about 78% in domestic air passenger traffic and about 164% in international air passenger traffic, assuming non-availability of Covid-19 vaccine on a wide scale up to H2CY2021. However, this will still be significantly lower than even FY16 levels," Icra added.

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“If a vaccine is launched earlier with reasonable availability, domestic air passenger traffic could witness a further upside in FY22, with an estimated growth of about 93%, and international air passenger traffic could witness an estimated growth of about 235%."

Passenger traffic for domestic airlines during January-December 2016 stood at 9.9 million,up 23.18% compared to 8.1 million during the corresponding period of the previous year, according to data from Directorate General of Civil Aviation (DGCA). Indian air passenger traffic has grown every year since then, the data shows.

According to Icra, Indian airlines will incur net losses of about 21,000 crore this fiscal year following the widespread disruptions caused by the covid-19 pandemic, and would require additional funding of up to 37,000 crore through FY23 to recover from their losses and debt.

With an improvement in passenger traffic next year, Icra expects the Indian aviation industry to post about 57% growth in revenues, and narrowing its net losses to about 146 billion from an estimated net loss of about 210 billion this year, said Kinjal Shah, vice president, Icra.

“The debt levels will remain high for the industry and are estimated to be range bound at around 500 billion (excluding lease liabilities) in FY2021 and FY2022, with the industry requiring an additional funding of 350-370 billion over FY2021 to FY2023," Shah said, adding that airline finances will remain stressed during the forthcoming fiscal year.

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