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COVID 2nd wave: Domestic air traffic down 67% in May, reaches June-July 2020 levels

COVID 2nd wave: Domestic air traffic down 67% in May, reaches June-July 2020 levels

Support from the Centre in terms of upward revision in airfares and coverage of the sector under the Emergency Credit Line Guarantee Scheme 3.0, a positive for the industry, says ratings agency ICRA

Air traffic in May is lower than the June-July 2020 levels when India was under the strictest lockdown Air traffic in May is lower than the June-July 2020 levels when India was under the strictest lockdown

Domestic passenger traffic stood at 19-20 lakh in May compared to 57.3 lakh in April 2021, recording a sequential decline of 65-67 per cent, ratings agency ICRA said in a report.

The air traffic plunge in May was lower than the June-July 2020 levels when India was under the strictest lockdown. The airlines' capacity deployment for May was lower by 54-55 per cent compared to April 2021 with 27,700 departures in May against 60,300 in April, indicating lower demand as people remain averse to travelling due to the rise in COVID-19 infections.

Kinjal Shah, Vice President & Co-Group Head, ICRA said for May 2021, the average daily departures were 900, significantly lower than 2,000 in April. The average number of passengers per flight during May was 72 against 93 in April. "The gradual decline depicts the continuing stress on demand, driven largely by the second wave of Covid-19, limiting travel to only necessary travel, while both leisure and business travel have been curtailed due to various state-wide restrictions and the spread of the infections," said Shah.

The Ministry of Civil Aviation (MoCA) had allowed increasing the capacity deployment on domestic routes from 33 per cent from May 25, 2020, to 80 per cent from December 03, 2020. However, capacity deployment was reduced to 50 per cent of pre-COVID levels from June 01, 2021, as the second COVID-19 wave hit India hard.

The demand for domestic travel is lower as people are avoiding air travel due to the rise in COVID-19 infections, and airlines are flying at a much lower capacity.

In addition, the MoCA also increased the minimum fare for domestic flights with effect from June 01, 2021. The lower airfare band has been increased by 13-15 per cent, keeping the upper limits unchanged. "This will allow airlines to recoup some part of the increase in aviation turbine fuel (ATF) prices, thereby cushioning some impact on the airlines' losses," the ICRA report noted.

The ratings agency further said the fare increase may not materially impact passenger traffic demand as in the current scenario the travel is limited to only necessary travel.

The government has also taken measures to boost air travel. The finance ministry has included the Civil Aviation sector under ECLGS 3.0, which provides airlines access to additional funding to the extent of 40 per cent of their loans outstanding or Rs 200 crore at attractive interest rates.

Also read: Domestic air travel to become costlier as govt hikes lower limit on fares

Also read: Domestic air travel: Airlines can operate only 50% of pre-COVID flights from June 1