Air passenger traffic grew 25 per cent in August, according to ICRA rating agency. Airlines have scaled up capacity by 27 per cent in August. However, passenger traffic on a year-on-year basis plunged by 77 per cent in August.
Passenger traffic grew by 19 per cent till August 31. A total of 70 lakh passengers travelled during the period since May 25, it said.
“The number of flights departing has been increased to 1,156 as on September 2. Average daily departures during August was 930, but lower than the average daily departures of 2,846 in August last year, but better than 780 in July this year,” said Kinjal Shah, Vice-President, ICRA.
The average number of passengers per flight in August was 98 against the average of 133 in August last year. The PLF for August 2020 has sequentially improved from around 55 per cent in July this year, she added.
In 2020-21, ICRA expects to witness a de-growth of 41-46 per cent in domestic passenger traffic and 65-72 per cent in international passenger traffic. Revenues of the Indian aviation industry are expected to witness significant de-growth. The profitability of the industry will also be adversely impacted due to lower revenues and high fixed costs. While some airlines have sufficient liquidity and/or financial support from a strong parentage, which will help them sustain over the near term, the airlines that were already in financial stress are now facing an existential crisis.
Many airlines have already undertaken several cost rationalisation measures. These include salary cuts for their employees, including leave without pay, and laying off pilots and crew members to cut costs. Some airlines have also sought deferment in their lease rental payments. However, until the cash inflows resume, the airlines will require funding support to meet their expenses.
The Ministry of Civil Aviation permitted increasing the capacity to 45% with effect from June 27 and further to 60% with effect from September 02. However, the domestic airlines are operating at a much lower capacity of 33 per cent in August 2020.