Investment Information and Credit Rating Agency of India (ICRA) recently released a report on the current Indian airports turnover and revised the previous outlook from ‘Negative’ to ‘Stable’. This change in the status is anticipated due to a rise in passenger footfalls across all Indian airports post-pandemic.
As per ICRA, the domestic passenger traffic in India is expected to reach the pre-pandemic level by March 2022, while the international traffic will recover completely by the second quarter of next fiscal starting April 2023.
“The overall recovery in domestic traffic remained strong and is expected to recover to 97-98% of pre-COVID levels in FY2023 itself,” ICRA said.
Post the resumption of international commercial operations on March 27, 2022, air traffic has registered a steady improvement in the last six months which is supported by the opening of major international destinations, easing of travel and quarantine restrictions, and an increase in aircraft capacity deployment.
Rajeshwar Burla, Group Head for Corporate Ratings at ICRA said: Given the uptick in economic activity as well as the expected traffic ramp-up in the coming months ahead of the festive and the vacation season, the passenger traffic is expected to sustain healthy growth momentum."
“The outlook revision to Stable from Negative reflects ICRA's expectation that passenger traffic is expected to surpass pre-COVID levels in the ensuing 12-month period from September 2022 to August 2023,” Burla further added.
“Supported by an improvement in the overall revenue and consequent operating leverage benefits along with the increase in tariff for some major airports the cash flows available for debt servicing and debt coverage metrics are expected to witness a gradual improvement going forward”, Burla concluded.
As per the ICRA forecast, the overall passenger traffic is expected to witness a growth of 71-73% year-on-year and reach 324-327 million which is almost 96% of the pre-pandemic level in FY 2023, while the international passenger traffic will cross the pre-pandemic level in FY 2024.