Home / News / Domestic air passenger traffic expected to grow 42% sequentially in June: Icra

Domestic air passenger traffic is expected to grow by 42% sequentially during June, as compared to the previous month, due to a decline in fresh numbers of infections across the country, rating agency Icra said in a statement on Tuesday.

According to the agency, domestic passenger traffic is estimated at about 29-30 lakh, implying a sequential growth of about 41-42% during June, compared to about19.8 lakh in May 2021. Airlines deployed about 46% higher capacity in June on an annual basis—with about 31,700 departures in June 2021, against 21,696 departures in June 2020.

On a sequential basis, the number of departures in June 2021 was higher by about 14-15%, as covid-19 infections demonstrated a downward trajectory, Icra added.

"For June 2021, the average daily departures were at about 1,100, significantly higher than average daily departures of about 700 in June 2020, and higher than about 900 (daily departures) in May 2021, though (this) remains significantly lower than about 2,000 (daily departures) in April 2021. The average number of passengers per flight during June 2021 was 94, against an average of 77 passengers per flight in May 2021," said Kinjal Shah, vice president and co-group head, Icra.

"Though there is some recovery observed in June 2021, there exists continued stress on demand, 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 restrictions, despite the decline in infections," Shah added.

Indian airlines resumed domestic operations on 25 May 2020, after being grounded for two months during a government-backed lockdown to contain the pandemic. At the time, airlines were allowed to operate only up to a third of their total capacity, with the cap later being increased to 45% and then to 60%. This was further increased to 80%.

Air traffic picked after the lockdown was lifted in May 2020 and rose every month till March 2021 before the second wave of covid-19 hit the country. In May, the government set a cap stating that India will be able to sell seats up to 50% of their total capacity on domestic flights citing a high number of infections and as travel demand fell during the second wave of the pandemic. However, the government on 5 June allowed airlines to sell up to 65% of their total capacity.

The government's latest decision to issue one-month tourist visas free of charge to the first five lakh customers, until 31 March 2022, provides much-needed impetus to inbound international travel, Icra said, adding that this however depends on the resumption of scheduled international travel operations that have been halted till at least 31 July.

"Rising air turbine fuel (ATF) prices (however) remains a near-term challenge," Icra added.

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