Indian aviation on a recovery trajectory

According to IATA, in 2021, overall traveler numbers were 47 per cent of 2019 levels. This is expected to improve to 83 per cent in 2022, 94 per cent in 2023, 103 per cent in 2024 and 111 per cent in 2025. In 2021, international traveler numbers were 27 per cent of 2019 levels. This is expected to improve to 69 per cent in 2022, 82 per cent in 2023, 92 per cent in 2024 and 101 per cent in 2025.

"The trajectory for the recovery in passenger numbers from Covid-19 was not changed by the Omicron variant. People want to travel. And when travel restrictions are lifted, they return to the skies. There is still a long way to go to reach a normal state of affairs, but the forecast for the evolution in passenger numbers gives good reason to be optimistic," said Willie Walsh, IATA's Director-General.

India's domestic air passenger traffic has grown by around 59 percent year-on-year to 84 million in FY22, although it is still about 40 percent lower as compared to the pre-pandemic level, credit ratings agency according to Icra. With the possibility of not witnessing another Covid wave, the financial year 2022- 2023 should be a better year for passengers. It will be a recovery year for those who may have lost their jobs or are aspiring to join the aviation industry too as there will be an employment generation due to the entry of new players.

Cargo is likely to remain a valuable revenue stream through 2022 and many airlines have adapted effectively to exploit this. In India, carriers are expected to achieve a 15 per cent year-on-year increase in cargo revenue.

Domestic passenger traffic for FY2022 is estimated at around 84 million, y-o-y growth of 59 percent, marginally higher than our estimate of 80-82 million, although it is around 40 percent lower than pre-Covid levels," Vice President and Sector Head of Icra Suprio Banerjee said.

The rising ATF prices continue to play a spoilsport for the industry and will pose a serious threat to the sector's earnings in FY23, it said. There is an expectation that air traffic to return to its 2019 peak in early 2023. "The largest industry segment is single-aisle aircraft. Deliveries of these aircraft increased by more than 40 per cent in 2021 and are expected to be another 40+ per cent in 2022.

It is expected that aerospace output will fully recover to pre-pandemic levels in 2022, with more growth in future years, said the experts. India has an aspiring population and that explains the huge potential for the aviation sector. The rising cost has impeded the profitability of airlines in India and has caused the demise of some yet aviation is seen as an attractive sector. In India, aviation is a cyclical business, and players must have deep pockets to sustain in the long term.