The Indian domestic aviation industry continues to witness recovery with air passenger traffic logging around 60% at 13.60 crore in FY23 annually, as per Investment Information and Credit Rating Agency of India Limited (ICRA’s) latest report.
The domestic air passenger traffic remained around 4% below the pre-pandemic volume of 14.15 crore, ICRA reported. The Indian carriers had flown a total of 8.52 crore passengers on local routes in the year ended March 2022, as per ICRA.
Suprio Banerjee, Vice President, ICRA said: “Domestic passenger traffic stood at 1.30 crore in March 2023, a growth of around 22% from March 2022 volume of 1.06 crore. In FY23, the overall airlines' capacity deployment was higher by 38% as compared to FY22.”
The airlines' capacity deployment in March 2023 was higher by 14% year-on-year and around 7 % more than pre-COVID level of March 2019, ICRA said.
The domestic passenger load factor of the airlines industry, according to ICRA is estimated at 89% in March 2023, against 82% in the year- ago period and 87% in March 2019, pre-COVID levels.
Despite a healthy recovery in passenger traffic, the domestic aviation industry continues to face challenges on account of elevated aviation turbine fuel prices and depreciation of the rupee against the US dollar, both of which have a major bearing on the airlines' cost structure, the report further said.
“The airlines' efforts to ensure fare hikes proportionate to their input cost increase will be key to expanding their profitability margins,” Banerjee added.