Continued recovery witnessed in domestic passenger traffic in September 2020, sequential improvement of ~37%: ICRA

The Indian aviation industry witnessed a continued recovery in domestic passenger traffic in September 2020, with a sequential growth (over August 2020) of ~37% to ~39 lakh passengers.  The capacity deployment in September 2020 at ~46% (vis-a-vis September 2019) is a significant increase over the ~33% capacity deployed in August 2020. On a Y-o-Y basis however, domestic passenger traffic declined by ~66%.

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 1,488 on Day 128 (September 28, 2020). For September 2020, the average daily departures were ~1,311, significantly lower than the average daily departures of 2,874 in September 2019, though much better than ~930 in August 2020. The average number of passengers per flight during September 2020 was 98, as against an average of 133 passengers per flight in September 2019. Thus, it is expected that the domestic aviation industry operated at a passenger load factor (PLF) of ~63% in September 2020, as against 85.5% in September 2019, that too on a low capacity. The PLF for September 2020 was similar to August 2020 despite the increase in capacity deployment by ~37%. Overall, from May 25, 2020 till September 30, 2020, the domestic passenger traffic has been ~11 million.”

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. maximum 1/3rd of their respective approved capacity of Summer Schedule 2020. It further permitted increasing the capacity to 60% with effect from September 02, 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.

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 the evacuation of Indian citizens from foreign shores, which started from May 07, 2020, the international passenger traffic (inbound and outbound) has been 8,41,634 for the period May 07, 2020 to September 30, 2020. For September 2020, the number of international passenger traffic was 208,893, a Y-o-Y decline of ~89%.

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$ 42/ 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, which is also lower by 38.1% 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.