Indian Carriers Hit Turbulence In April 2021 With Decline In Passengers

Indian - aviatorsbuzz

For April 2021, Indian domestic passenger traffic is estimated at ~55-56 lakh, implying a sequential decline of ~29% compared to ~78.2 lakh in March 2021.

With this, the domestic passenger traffic has reached lower than the October 2020 levels. The airlines’ capacity for April 2021 was lower by ~15% compared to March 2021 (~60,300 departures, against ~71,300 departures in March 2021), indicating the declining demand scenario stemming from averseness of consumers to travel due to the rise in COVID-19 infections.

Indian Domestic Flights Hit

It is to be noted that domestic airline operations were completely ceased during April 2020 due to the nationwide lockdown owing to the COVID-19 pandemic.

According to Ms. Kinjal Shah, Vice President and Co-Group Head, ICRA: “The number of flights departing has also gradually declined from February 2021 onwards, with the average daily departures close to ~2,000 in April 2021, down from ~2,300 in March 2021 and February 2021. The average number of passengers per flight during April 2021 was 93, against an average of 109 passengers per flight in March 2021.”

The gradual decline depicts the stress on demand, driven largely by the second wave of COVID-19 and passenger fear against travelling.

Key Highlights:

  • For April 2021, domestic passenger traffic is estimated at ~55-56 lakh, implying a sequential decline of ~29% compared to ~78.2 lakh in March 2021. With this, the domestic passenger traffic has reached lower than the October 2020 levels
  • The number of flights departing has also gradually declined from February 2021 onwards, with the average daily departures close to~2,000 in April 2021, down from ~2,300 in March 2021 and February 2021. The average number of passengers per flight during April 2021 was 93, against an average of 109 passengers per flight in March 2021
  • The airlines’ capacity for April 2021 was lower by ~15% compared to March 2021 (~60,300 departures, against ~71,300 departures in March 2021), indicating the declining demand scenario stemming from averseness of consumers to travel due to the rise in COVID-19 infections
  • The ATF prices in April 2021 were higher by 59.8% on a YoY basis, and in May 2021, prices have been substantially higher by 103.4% on a YoY basis

The Ministry of Civil Aviation (MoCA) permitted increasing the capacity gradually from 33%, with effect from May 25, 2020, to 80%, with effect from December 03, 2020. The same, as per the latest announcement by the MoCA, continues till May 31, 2021.

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 ~34 lakh for the period May 7, 2020 to April 30, 2021.

For April 2021, international passenger traffic for Indian carriers under the VBM was estimated at ~3.6 lakh, a sequential decline of ~21%.

In April 2021, many countries like the US, the UK, Singapore, Kuwait, France, Canada, Australia, Iran, Indonesia and the UAE, which had ATB arrangements or under the VBM, have banned flights from India citing the increasing coronavirus cases.

VBM, ATB – Only Revenue Source

The international operations through VBM or the ATB route were the only source of revenue for airlines and the cancellation of flights by the destination countries will further impact the beleaguered domestic carriers.

In addition, following the pandemic, crude oil prices declined materially – reaching a low of ~US$19/ barrel in April 2020, thus leading to a decline in Aviation Turbine Fuel (ATF) prices.

However, the crude oil prices have increased gradually since then, and currently ranges at around US$65/ 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, by 10.2% in January 2021, by 5.4% in February 2021, and by 10.4% in March 2021.

It declined sequentially by 1.8% in April 2021. However, it has increased sequentially again by 5.8% in May 2021.

ATF Prices Higher

While until February 2021, the ATF prices were still lower on a YoY basis, in March 2021 and April 2021, prices were higher by 3.0% and 59.8% respectively on a YoY basis.

In May 2021, the prices have been significantly higher by 103.4% on YoY basis, attributed to the low base of May 2020, when the prices declined YoY by 53.8% due to the impact of the pandemic.

 

Previous articleBVLOS Flying Drones: SpiceJet, Swiggy Among 20 To Get Permissions
Next articleVHF Omni-Directional Range (VOR)