The Indian aviation industry continues its recovery trajectory, with domestic passenger traffic reporting approximately 3 per cent year-on-year growth in April 2024. This growth is approximately 21 per cent higher than pre-Covid levels, indicating a significant rebound in air travel demand.
According to ICRA‘s analysis of the monthly domestic passenger traffic data for April 2024, the industry witnessed an estimated domestic air passenger traffic of around 132.8 lakh passengers. While this figure is marginally lower by 0.6 per cent compared to March 2024, it marks a notable YoY growth of 3.1 per cent from April 2023 and a substantial 21 per cent increase from the pre-Covid levels of April 2019.
For the fiscal year 2024 (April–March), domestic air passenger traffic totaled approximately 154 million passengers, reflecting a year-on-year growth of around 13 per cent. This growth aligns with ICRA’s projections and surpasses the pre-Covid levels observed in fiscal year 2020. Additionally, international passenger traffic for Indian carriers in FY2024 stood at around 296.8 lakh passengers, registering a robust year-on-year growth of 24 per cent and surpassing pre-Covid levels by 30 per cent.
The capacity deployment of airlines in April 2024 increased by approximately 2 per cent compared to April 2023 but experienced a slight decline of 3 per cent from March 2024. Despite these fluctuations, the domestic aviation industry maintained a healthy passenger load factor (PLF) of around 88 per cent in both April 2024 and April 2023, with a slightly lower PLF of around 86 per cent in March 2024.
The share of Indian airlines in international passenger traffic that originates from, terminates in, or transitions through India is projected to increase by 50 percent by fiscal 2028 from 43 percent in 2024, as reported by Crisil Ratings. The rating agency stated that the enhancement would be a result of Indian airlines increasing their fleet size.
However, challenges persist in the industry, including flight cancellations and delays due to shortages of cabin crew and pilots, impacting overall industry capacity and customer experiences. Additionally, average Aviation Turbine Fuel (ATF) prices witnessed a slight decline of 0.4 per cent sequentially in April 2024 but rose by 0.7 per cent in May 2024 compared to the previous year.Despite these challenges, ICRA expects a gradual recovery in aviation industry earnings, projecting a net loss of INR 30-40 billion for FY2025, significantly lower than the levels observed in FY2023. This optimistic outlook is supported by healthy passenger traffic growth and maintained pricing discipline among airlines, indicating a positive trend in the industry’s financial performance.
