India’s Domestic Air Passenger Traffic Rises by 6.3% to 13.85 Million in October

Domestic air passenger traffic rose to 138.5 lakh in October, as reported on Thursday, up by 6.3% over 130.3 lakh of the previous month.
Year-on-year growth for October domestic air passenger traffic was at 9.6% and quite significantly higher by 12.8% compared with pre-Covid levels of 122.8 lakh in October 2019, data by credit rating ICRA showed.

The domestic air passenger traffic stood at 932.0 lakh for the first seven months of the current fiscal (April-October) with a YoY growth of 5.9 per cent.

Indian carriers' international passenger traffic stood at 162.6 lakh in H1 FY25, with a YoY growth of 16 per cent.

The airlines capacity deployment in October 2024 stood at 7.6 percent more than in October 2023 while it was higher by 5.2 per cent over September 2024, the report added.
"The outlook for the Indian aviation industry remains stable, driven by expectations of moderate growth in domestic air passenger traffic and a relatively stable cost environment in FY2025," the report added.

Recovery in the pace of earnings in industries is expected to be slow since business belongs to the kind of business having a high fix cost.

ICRA expects the Indian aviation industry to incur a net loss of Rs 20-30 billion in FY2025 and FY2026 against Rs 10 billion in FY2024 "due to expected pressure on yields as airlines look to sustain adequate passenger load factor (PLF) even as it is likely to have to grapple with the persistence of high ATF prices".

Various issues including supply chain disruptions have visited the Pratt and Whitney (P&W) engines that several airlines are provided with. Even engine failure cannot be ruled out.

Go Airlines (India) Limited grounded half of its fleet due to faulty P&W engines in FY2024, which left its operations paralyzed for some time.

Also with more than 70 aircraft grounded on September 30, due to the problem of the P&W engine, this includes the aspect related to powder metal (used in making some parts in these engines), that contaminated Indigo's P&W aircraft.

Overall, there were 134 aircraft for select airlines grounded as of June 30, which translated to 15-17% of the industry fleet, thus affecting the overall industry capacity, measured in available seat kilometer or ASKMs, according to the report.