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Sunday, 08 November, 2020, 11 : 00 AM [IST]

Air travel registers 33% sequential improvement in domestic traffic during Oct: ICRA

The Indian aviation industry has witnessed continued recovery in domestic passenger traffic in October 2020, with a sequential growth (over September 2020) of 33% to 52 lakh passengers. The capacity deployment in October 2020 at 52% (vis-a-vis October 2019) is a significant increase over the 33% capacity deployed in August 2020 and 46% capacity deployed in September 2020. On a Y-o-Y basis however, domestic passenger traffic declined by 58%.

Giving further analytical insights, Kinjal Shah, Vice President, ICRA, says, “The number of flights departing has also gradually increased from 416 on Day 1 to 1,749 on Day 156 (October 26, 2020). For October 2020, the average daily departures were 1,574, significantly lower than the average daily departures of 3,031 in October 2019, though better than 1,311 in September 2020. The average number of passengers per flight during October 2020 was 106, as against an average of 131 passengers per flight in October 2019. 

Thus, it is expected that the domestic aviation industry operated at a passenger load factor (PLF) of 68% in October2020, as against 83.6% in October 2019, that too on a low capacity. The PLF for October 2020 was higher than the 63.2% in September 2020 despite the increase in capacity deployment by 24%. Overall, from May 25, 2020 till October 31, 2020, the domestic passenger traffic has been 16 million.”

The Ministry of Civil Aviation (MoCA) permitted increasing the capacity to 45% with effect from June 27, 2020; post the initial recommencement of operations of the scheduled domestic flights with effect from May 25, 2020 to a limited extent i.e. maximum 1/3rd of their respective approved capacity of Summer Schedule 2020. It further permitted increasing the capacity to 60% with effect from September 02, 2020. This apart, through a circular dated August 27, 2020, the MoCA has also amended certain provisions, like allowing airlines to provide meals on board, serve pre-packed snacks/meals/ pre-packed beverages, and allowing in-flight entertainment, however with riders.

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 shores, which started from May 07, 2020, the international passenger traffic (inbound and outbound) has been 10,96,709 for the period May 07 to October 31, 2020. For October 2020, international passenger traffic was recorded at 255,075, a Y-o-Y decline of 87%. However, it improved sequentially by 22%.

As for aviation turbine fuel (ATF) prices, following the pandemic outbreak, crude oil prices declined materially – reached a low of USD 19/ barrel in April 2020 thereby leading to a decline in ATF prices. However, the crude oil prices have increased gradually since then, and currently range around USD 39/ 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. However, the November 2020 prices are still lower by 33.1% on a Y-o-Y basis. “The prolonged shutdown of manufacturing activities in several countries and the subsequent impact of the outbreak on the global economic activity will keep the crude oil prices and thus the ATF prices low,” Shah added. 

 
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