Projected 7-10% Increase in India’s Domestic Air Passenger Traffic for FY25
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New Delhi, Dec 3 (NationPress) India is anticipated to experience a 7-10% growth (year-on-year) in its domestic air passenger traffic, projected to hit 164-170 million in FY25, based on a report released on Tuesday.
During the first half of the current fiscal year (H1 FY25), domestic air passenger traffic reached 79.3 million, marking a year-on-year increase of 5.3%, despite challenges posed by intense heat waves and other weather-related issues, as noted by the credit rating agency ICRA.
In contrast, the international passenger traffic growth for Indian airlines was significantly stronger, showing an increase of 16.2% in H1 FY25.
This positive trend is projected to persist throughout the remainder of FY25, with total international passenger traffic expected to reach between 34-36 million for the entire year, reflecting a year-on-year growth of 15-20%.
ICRA maintains a stable outlook for the Indian aviation sector, given the continuous rise in both domestic and international air passenger traffic.
The disparity between revenue per available seat kilometer and cost per available seat kilometer (RASK-CASK) has shown some slight moderation in H1 FY25 compared to FY24, driven by rising fuel costs and overall increased expenditures due to aircraft groundings, while yields have slightly decreased as airlines aimed to sustain adequate passenger load factors (PLFs).
Nevertheless, an uptick is anticipated in H2 FY25 as passenger traffic remains robust. The industry’s debt metrics for FY25 are expected to stay stable, with an interest coverage ratio of 1.5-2.0x, as indicated by the report.
In FY24 and H1 FY25, Indian carriers accounted for 43-44% of the international traffic to and from India.
“This presents significant growth opportunities for Indian airlines to enhance their presence in international markets over the medium term,” Shah commented.
Meanwhile, the proportion of grounded aircraft has declined from 20-22% in September 2023.
As of September 30, the aviation sector had a total fleet of 853 aircraft. Numerous large aircraft purchase orders have been announced by various industry players, and estimates suggest that pending aircraft deliveries total around 1,660, nearly double the current operational fleet.
