Domestic air traffic soars to record high in December

: 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 denominated in dollar terms.

As on 1 January, jet fuel prices in Delhi were at 101,993.17 per kilolitre, registering a 4% decline as compared with December and nearly 6% lower than a year earlier. Despite the sudden exit of Go First in May and worsening supply chain issues, as against the improvement that was expected, domestic air traffic has shown resilience, aviation research firm CAPA India said in a recent report.

It expects air traffic to reach around 155 million passengers in the ongoing financial year ending 31 March, a 15% jump over the previous year. Livemint tops charts as the fastest growing news website in the world to know more. Unlock a world of Benefits! From insightful newsletters to real time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away!.