India's air traffic poised to soar 15% in 2023-24: Report
Nov 28, 2023
New Delhi [India], November 28 : India's air traffic is expected to rise about 15 per cent to 155 million passengers in 2023-24, despite the grounding of Go First, according to aviation advisory and research firm CAPA India.
This projection is in line with the firm's March 2023 estimate.
Despite the sudden exit of Go First in May this year, the fact that there are 150+ aircraft still on the ground, and the worsening supply chain issues (in contrast to the improvement that was expected), domestic traffic in India has shown resilience, the advisory firm said in its latest aviation outlook report.
"As of now, Indian carriers have around 150+ aircraft on the ground, largely due to supply chain and other issues," the report said.
This could cross 200 aircraft by the end of March 2024.
"This could cross 200 aircraft by the end of March 2024. This is also creating a shortage of parking bays, with aircraft having to be parked at hangars and MROs (maintenance, repair and overhaul) across the country. If the number of groundings increases, the parking challenges will become more acute," it added.
Further, India's international air traffic has also maintained growth in line with CAPA's guidance and is expected to end the year at around 70 million passengers.
Overall industry profitability is expected to be largely in line with CAPA's initial guidance of a loss of USD 1.648 billion, of which full-service carriers are expected to account for USD 1.4-1.5 billion and low-cost carriers for USD 200-300 million.
The forecast for low-cost carriers' losses has been revised downwards from earlier as a result of IndiGo's exceptional profitability in April-June (Q1).
"Despite having a very challenging FY2024 from an operational perspective due to the Pratt & Whitney engine issues, IndiGo is expected to post a record profit of USD 500 million and will see its cash balances increase by USD 1.2+ billion."
"Air India Group will have added over 60 aircraft by the end of this financial year, including 30 for Air India, 20 for Air India Express and 10+ for Vistara, by which time the total fleet will reach close to 300 aircraft. The airline continues to expand rapidly as it seeks to make up for lost time."
Further, the advisory firm, in its latest outlook, said India's operational fleet continues to be severely constrained.
By the end of this year, out of a projected 789 aircraft on the register, only 588 are expected to be operational, it said.
"Airlines such as IndiGo and SpiceJet have resorted to inducting aircraft on wet lease to bridge the shortfall in capacity. Upto 30 wet-leased aircraft are expected to be operating in India by Mar-2024," it said.
On the most crucial ticket prices, it said domestic and international fares continue to normalise from post-pandemic highs, despite the shortages in the number of aircraft.
