Air traffic set to regain pre-pandemic heights this fiscal: Crisil
Oct 17, 2022
New Delhi [India], October 17 : Airport operators are expected to see their traffic volume recover to the pre-pandemic level during the current financial year 2022-23, thus spurring revenue recovery, said rating agency Crisil Ratings.
An increase in air tariffs will also support the revenue recovery, the rating agency said in the report. However, the air traffic recovery estimates and revenue projections remain sensitive to macroeconomic uncertainties and geopolitical developments.
Between fiscal 2015 and 2020, air traffic, the report said, logged a healthy compound annual growth rate of 12 per cent, driven by growing penetration of air travel beyond metro cities pushed by tailwinds from government schemes such as regional connectivity schemes such as UDAN.
Then the pandemic hit, and air traffic volume nosedived in fiscal 2021. Fiscal 2022 saw only partial recovery (at 55 per cent of fiscal 2020 traffic), given the multiple waves of infection and restrictions on the movement of people.
In fiscal 2023, with the pandemic impact seemingly behind us, air traffic volume, it said, is expected to increase to the fiscal 2020 level of 340 million passengers.
In the first five months (till August), the volume was 88 per cent of the corresponding fiscal 2020 level but is expected to pick up in the remaining months of the year because of improving business travel sentiment, pent-up demand on the international segment, and de-bottlenecking of capacity availability on aircraft and international slots.
"This fiscal, traffic volume is expected to recover to the pre-pandemic level, implying a robust growth of 75 per cent over the fiscal 2022 level. The pick-up is expected to be led by domestic traffic as slots and routes on the international front are still opening up," said Manish Gupta, Senior Director, CRISIL Ratings.
"In the first five months of this fiscal, domestic traffic stood at 92 per cent of the corresponding fiscal 2020 mark, while international traffic was at 75 per cent. This cements our confidence for healthy volume growth in the current fiscal and a return to near-double-digit growth next fiscal," Gupta added.
Further, aeronautical tariffs have increased by 30 per cent for the top 4 private airports, which the report said will help aeronautical revenue reach 120 per cent in fiscal 2023.
Non-aeronautical revenue, on its part, is recovering towards 90 per cent of the quantum in fiscal 2020 for this year.
Consequently, the revenue of the private airports is expected to be 105 per cent and 130 per cent of fiscal 2020 revenue in fiscal 2023 and 2024, respectively.
