New Delhi India’s domestic air passenger traffic is projected to grow nearly 59 per cent year-on-year to 84 million in FY12, though it is still about 40 per cent lower than pre-pandemic levels, credit rating agency ICRA said on Monday. said. It also expects that Aviation Turbine Fuel (ATF) prices, which are fueled by geopolitical issues, will remain a near-term challenge for the industry and a key determinant of profitability for the sector. Icra said that on a sequential basis, domestic passenger traffic grew by nearly 37 per cent to 10.6 million in March due to the impact of the pandemic due to normalcy in airline operations.

Passenger traffic on local air routes stood at 7.7 million in February 2022. Traffic growth stood at 35 per cent in March this year, up from 7.8 million in the same month a year ago. ICRA said the airlines’ capacity deployment for March 2022 registered a growth of 12 per cent at 80,217 departures as compared to over 71,548 departures in the same month last year. y

The rating agency said domestic departures registered a 42 per cent increase in March this year compared to the previous month, driven by the increasing pace of vaccination and the rapid reduction of the third wave of COVID-19, which has hit travel. Allowed for the expeditious lifting of restrictions.

“Domestic passenger traffic for FY22 is estimated at around 84 million, an annual growth of 59 per cent, slightly higher than our estimate of 80-82 million, though it is around 40 per cent compared to pre-COVID levels. The percentage is low,” said Supriyo Banerjee, vice-president and head of sector ICRA. He said that for March this year, the average daily departures were around 2,588, which was higher than the average daily departures of around 2,308 in March 2021, and notably higher than around 2,023 in February 2022.

Banerjee said the average number of passengers per flight during March this year was 132, while in February the average number of passengers per flight was 135. According to ICRA, the resumption of scheduled international operations from March 27 after a gap of almost two years is a major positive development.

The rating agency said that in view of the high crude oil prices and geopolitical issues arising out of the Russian-Ukraine war, ATF prices have risen by about 93 per cent year-on-year in April this year. It added that rising ATF prices are playing poorly for the industry and will pose a serious threat to the sector’s earnings in FY23.