India's intl air traffic to reach 115-125 mn by FY30

CAPA Advisory projected that by 2029-30 India's international traffic is estimated to increase by 50-60 million annual passengers from pre-Covid level to reach 115-125 million.

In my opinion, the key factors that will determine the pace of recovery are the successful implementation of government initiatives, new private investment and opening up of regional airports. 2022 holds a lot of promise.

Airlines could finally be out of the woods in the next couple of months. While this is still dependent on not having another wave of Covid, hoping for de-escalation of tensions between Russia and Ukraine and subsequent fall in oil prices, and having a steady flow of passengers even at higher fares.

The years 2019-2020 have seen an increase in passenger demand from tier-II cities. MOCA presently has set a target of operationalising as many as 100 unserved and underserved airports by 2025 under UDAN. Out of that, 61 airports have already been operationalised. At this stage, when the Indian aviation industry is finally showing signs of recovery, the industry cannot afford further casualties like the high price of aviation turbine fuel. The aviation minister has stated that with the current tax structure of the fuel, India cannot have a robust civil aviation sector. He, therefore, urged States and Union Territories to reduce tax, as it will help provide a fillip to the industry.Covid-19 has given the Indian aviation industry an opportunity to re-imagine its future. For now, as passenger traffic nears pre-pandemic levels and with ambitious targets set by the government, it appears that 2022 may prove to be a defining period for the sector.

"Domestic traffic in FY22 is expected to reach 70-80 per cent of FY20 levels. International traffic is only expected to recover to 35-40 per cent of FY20 levels. In the absence of a full recovery in higher-yielding segments such as corporate travel, airlines cannot be profitable," CAPA India said.

"Airport operators are also expected to increase charges in light of the impact of the pandemic on their financials. They are likely to see continued weakness in non-aero revenue in FY22," CAPA India added.

It expects the air passenger traffic to double again by 2039-40 to around 240 million passengers and continue to grow. Air India's privatisation, large fleet of long haul narrow-bodies, and possible revival of Jet Airways are some of the reasons to be bullish about the prospects for Indian carriers' expansion.