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Monday, 11 January, 2021, 17 : 30 PM [IST]

Air travel registers 12% sequential growth in December: ICRA

The Indian aviation industry has witnessed a continued recovery in domestic passenger traffic in December 2020, with a sequential growth (over November 2020) of 12% to 71 lakh passengers. The capacity deployment in December 2020 at 67% (vis-a-vis December 2019) is a significant increase over the 52% capacity deployed in October 2020 and 59% in November 2020. On a YoY basis, however, domestic passenger traffic declined by 45%.

According to Kinjal Shah, Vice President, ICRA, “The number of flights departing has also gradually increased from 416 on Day 1 to 2,230 on Day 219 (December 28, 2020). For December 2020, the average daily departures were 2,048, significantly lower than the average daily departures of 3,062 in December 2019, though better than 1,806 in November 2020. The average number of passengers per flight during December 2020 was 112, against an average of 137 passengers per flight in December 2019. Thus, it is expected that the domestic aviation industry operated at a passenger load factor (PLF) of 72% in December 2020, against 87.9% in December 2019, that too on a low capacity. The PLF for December 2020 was lower than the ~75% in November 2020, due to the increase in capacity deployment by 17%. Overall, from May 25, 2020 till December 31, 2020, domestic passenger traffic has been pegged at 29.9 million.”

While the scheduled international operations are yet to start, the MoCA has permitted international operations under the Vande Bharat Mission (VBM) and Air Transport Bubbles (ATB). Under the VBM for evacuation of Indian citizens from foreign countries, which started from May 07, 2020, the international passenger traffic (inbound and outbound) for Indian carriers has been 17.7 lakh for the period May 2020 to December 31, 2020. For December 2020, international passenger traffic for Indian carriers was recorded at 3.1 lakh, a YoY decline of 87%.

As for the aviation turbine fuel (ATF) prices, following the pandemic, crude oil prices declined materially – reaching a low of USD 19/ barrel in April 2020, thus leading to a decline in ATF prices. However, the crude oil prices have increased gradually since then, and currently range at around USD 53/ barrel. Consequently, the ATF prices increased sequentially by 24.1% in July 2020 and by 4.2% in August 2020. However, it declined sequentially by 3.4% in September 2020 and by 5.6% in October 2020, before increasing by 4.6% in November 2020, by 9.1% in December 2020 and by 10.2% in January 2021. The January 2021 prices are still lower by 21.7% on a YoY basis. The prolonged shutdown of manufacturing activities in several countries and the subsequent impact of the pandemic on the global economic activity will keep the crude oil prices and thus the ATF prices low.

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