India’s Domestic Air Passenger Traffic: India is projected to see 7-10 per cent growth (year-on-year) in domestic air passenger traffic at 164-170 million in FY25, according to a report on Tuesday. In the first half this fiscal (H1 FY25), the domestic air passenger traffic stood at 79.3 million, witnessing a YoY growth of 5.3 per cent, partly impacted by the severe heat waves and other weather-related disruptions, according to credit rating agency ICRA.
The international passenger traffic growth for Indian carriers expanded and was healthier at 16.2 per cent in H1 FY25. This momentum is expected to continue for the balance part of FY25 as well, reaching an estimated level of 34-36 million for the full year, representing a YoY growth of 15-20 per cent.
ICRA has maintained its stable outlook on the Indian aviation industry, amidst the continued growth in domestic and international air passenger traffic.
The spread between revenue per available seat kilometre and cost per available seat kilometre (RASK-CASK) saw some moderation in H1 FY25 over FY24 due to higher fuel prices and overall increased costs amid grounding of aircraft, while yields moderated marginally as airlines strove to maintain adequate passenger load factors (PLFs).
Nonetheless, the same is expected to pick up in H2 FY25, amid healthy passenger traffic. The industry debt metrics in FY25 are expected to remain stable, with interest coverage of 1.5-2.0x times, the report mentioned. In FY24 and H1 FY25, the share of Indian carriers in international traffic (to and from India) stood at 43-44 per cent.
“This offers adequate growth potential for Indian carriers to gain traction in international traffic over the medium term,” Shah added. Meanwhile, the percentage of aircraft grounded has reduced from 20-22 per cent in September 2023.
As on September 30, the industry had a total fleet of 853 aircraft. There are large aircraft purchase orders announced by various players in the industry and as per the indicative numbers, the total pending aircraft deliveries is around 1,660, which is almost double the current fleet in operations.
