Air Passenger Traffic Up 25%: ICRA

Domestic Mumbai-airport - Aviatorsbuzz
File photograph integrated Terminal 2 of Chhatrapati Shivaji Maharaj International Airport, Mumbai. Source: rediff.com

The average daily departures were ~930 in August 2020 which is significantly lower than the average daily departures of 2,846 in August 2019, though better than 780 in July 2020

 

  More than 7 million domestic passenger traffic from May 25, 2020 till August 31, 2020

ICRA, a Moody’s Investors Service Company has observed that the Indian Aviation industry witnessed a recovery in domestic passenger traffic in August 2020, with a sequential growth of 25% to 26 lakh passengers over July 2020.

However, it witnessed a Year-over-Year (YoY) decline of 77%. The capacity deployment in August 2020 at 33% (vis-a-vis August 2019) is rather a slow uptick despite recommencement of operations over three months ago. However, it was an increase over the 27% capacity deployed in July 2020.

Giving further analytical insights, Ms. Kinjal Shah, vice-president, ICRA, says, “The number of flights departing has also gradually increased from 416 on Day 1 to 1,156 on Day 101 on September 2, 2020. For August 2020, the average daily departures were 930, significantly lower than the average daily departures of 2,846 in August 2019, though better than 780 in July 2020.”

Ninety-eight Passengers per-Flight

ICRA noted that the average number of passengers per flight during August 2020 was 98, as against an average of 133 passengers per flight in August 2019. Thus, it is expected that the domestic aviation industry operated at a Passenger Load Factor (PLF) of 63% in August 2020, as against 85.1% in August 2019, that too on a very low capacity. “The PLF for August 2020 has sequentially improved from 55% in July 2020 despite the increase in capacity deployment by 19%. Overall, from May 25, 2020 till August 31, 2020, the domestic passenger traffic has been more than 7 million,” Ms. Shah said.

Increase in Capacity

The Ministry of Civil Aviation (MoCA) permitted increasing the capacity to 45% with effect from June 27, 2020. This move came 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.

MoCA further permitted increasing the capacity to 60% with effect from September 2, 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.

VBM Flights

While 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 7, 2020, the international passenger traffic (inbound and outbound) has been 6,32,741 for the period May 7, 2020 to August 31, 2020. For August 2020, the number of international passenger traffic was 2,16,666, a Y-o-Y decline of 89%.

ATF Price Decline

As for Aviation Turbine Fuel (ATF) prices, following the pandemic outbreak, crude oil prices declined materially – reached a low of US$ 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 ranges around US$ 44/ 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, which is also lower by 32.3% 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,” Ms. Shah added.

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Aditya Anand
Deputy Editor, AviatorsBuzz Aditya Anand in his nearly two decades of Journalism experience has tracked Aviation, Travel, and Hospitality closely and reported on it for major publications like The Hindu, Mumbai Mirror, and MIDDAY.