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Air traffic volume expected to increase, likely to recover to pre-pandemic level: Report

The increase in traffic volume is expected to be led by domestic traffic, as slots and routes on the international front continue to open up, suggest Crisil report. In FY23, with the pandemic impact seemingly behind us, air traffic volume is expected to increase to the fiscal 2020 level of around 340 million passengers.

Air traffic volume expected to increase likely to recover to pre pandemic level Report gcw
First Published Oct 17, 2022, 3:50 PM IST

Air passenger traffic volume is expected to recover to the pre-pandemic level, implying a robust 75 per cent year-on-year growth this fiscal, a report said on Monday.  As slots and routes on the international front are still opening up, the increase in traffic volume is anticipated to be led by local traffic, according to a research by the domestic credit rating agency Crisil.

Additionally, it stated that this fiscal year's traffic volume rebound to pre-pandemic (fiscal 2020) levels is anticipated by airport operators. This will result in a recovery in income that will be aided by an increase in tariffs. With the pandemic impact presumably behind us, it is anticipated that air traffic volume would rise to the fiscal 2020 level of about 340 million passengers in FY23.

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The volume was roughly 88% of the corresponding fiscal 2020 level in the first five months (through August), but it is anticipated to increase in the remaining months of the year due to improved business travel sentiment, pent-up demand in the international segment, and the de-bottlenecking of capacity availability on aircraft and international slots, the report said.

Traffic volume is predicted to increase by 75% this fiscal over fiscal 2022 levels, returning to pre-pandemic levels. The report said that because private airports are nearing the end of their growth phase, revenue recovery is essential to meet escalating debt-servicing needs.

Reports further suggest that between fiscal 2015 and 2020, air traffic will experience a healthy compound annual growth rate of about 12%, driven by expanding air travel outside of major cities, which will benefit from government programmes like RCS and UDAN1 and the emphasis on infrastructure development.

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After that, the pandemic struck, and in fiscal 2021, aviation travel volume plummeted. According to Crisil, the fiscal year 2022 witnessed only a partial rebound (at 55% of the fiscal year 2020 traffic). This is because there have been several virus waves and there are constraints on how people may move around. The report further said that macroeconomic uncertainty and geopolitical developments continue to have an impact on the predictions for aviation traffic recovery and revenue expectations.

(With PTI inputs)

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