Domestic air traffic soars to record high in December

livemint.com:

NEW DELHI : Domestic air traffic reached its highest monthly record in December, and is expected to soar past pre-covid levels with more people in India opting to travel by air even as fares increase. About 13.8 million passengers travelled by air in December, as per a back-of-the-envelope calculation based on daily domestic air traffic data shared by the civil aviation ministry. That beats the earlier high of 13.2 million passengers recorded in May.

Overall, about 152 million passengers are estimated to have travelled by air in 2023, the provisional figures show, surpassing the 144.2 million passengers recorded in 2019. While the average daily air traffic in December was about 440,000 passengers, the highest daily traffic in 2023 was 467,451 passengers on 25 November. Ratings agency ICRA has a stable outlook on India’s aviation industry given the fast-paced recovery in domestic passenger traffic.

This, while airlines have been able to increase fares, allowing for improved spread on the revenue per available seat kilometre to the cost per available seat kilometre, ICRA said. “The domestic traffic at Indian airports recovered to 98% of pre-covid levels in FY2023 and the domestic traffic is expected to increase by 13-15%," said Vinay Kumar G, vice president and sector head-corporate ratings, at ICRA. “Further, domestic traffic is likely to achieve 111-113% of pre-Covid levels," he said.

With tailwinds supporting demand for air travel, it will be important to keep an eye on aviation turbine fuel prices. Fuel accounts for 30-40% of an airlines’ expenses. About 45-60% of an airlines’ operating expenses—including aircraft lease payments, fuel expenses, and a significant portion of aircraft and engine maintenance expenses—are