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Domestic Traffic Sees a Flat Y-o-Y growth in March 2021

Domestic passenger traffic in March 2021 has been estimated at ~77-78 lakh, implying a flat growth on a Y-o-Y basis on a low base of March 2020 (which had witnessed a Y-o-Y decline of 33.1% in domestic passenger traffic) as domestic travel was affected with effect from March 25, 2020.

Passenger traffic in March 2021 witnessed a marginal sequential decline of ~1% over ~78.3 lakh domestic passenger traffic in February 2021. The airlines’ capacity for March 2021 was around 2% higher than their March 2020 capacity (~71,300 departures in March 2021, against 69,910 departures in March 2020). On a sequential basis, the number of departures in March 2021 were higher by ~11%.

According to Kinjal Shah, Vice President, ICRA, “The number of flights departing has also gradually increased from 416 on Day 1 to 2,885 on Day 267 (February 14, 2021). For March 2021, the average daily departures were ~2,300, higher than the average daily departures of 2,255 in March2020 (effect of cessation of domestic travel for the last seven days), and marginally higher than ~2,296 in February 2021. The average number of passengers per flight during March 2021 was 109, against an average of 111 passengers per flight in March 2020. Thus, it is expected that the domestic aviation industry operated at a passenger load factor (PLF) of ~72% in March 2021, against 73.1% in March 2020, which was also impacted by the pandemic. The PLF for March 2021 was lower than the ~79% in February 2021, due to the increase in capacity deployment by ~11%. Overall, for FY2021 (i.e. from May 25, 2020 till March 31, 2021), domestic passenger traffic has been pegged at ~53.4 million, a Y-o-Y decline of ~62% (over FY2020), in line with ICRA’s estimates.”

The Ministry of Civil Aviation (MoCA) permitted increasing the capacity to 45%, with effect from June 27, 2020; post the initial recommencement of operations of the scheduled domestic flights, with effect from May 25, 2020 to a limited extent i.e. a maximum 1/3rd of their respective approved capacity of the Summer Schedule 2020. It further permitted increasing the capacity to 60%, with effect from September 02, 2020, to 70%, with effect from November 11, 2020; and further to 80%, with effect from December 03, 2020.

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 ~30 lakh for the period May 07, 2020 to March 31, 2021. For March 2021, international passenger traffic for Indian carriers under VBM was recorded at ~4.5 lakh, a sequential increase of ~12%.

As for the aviation turbine fuel (ATF) prices, following the pandemic, crude oil prices declined materially – reaching a low of ~US$19/ barrel in April 2020, thus leading to a decline in 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. While until February 2021, the ATF prices were still lower on a Y-o-Y basis, the March 2021 prices were higher by 3.0% on a Y-o-Y basis, and April 2021 prices have been higher still by a whopping 59.8% on a Y-o-Y basis, attributed to the low base of April 2020, when the prices declined sequentially by 36.7% due to the impact of the pandemic.

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