India's domestic air passenger traffic may grow 8-13% in FY'24, to 150-155 mn: ICRA

Building on the fast-paced recovery in FY2023, India's domestic air passenger traffic is expected to grow by 8-13 percent in FY2024, thus reaching 150-155 million, surpassing the pre-COVID levels of 141.2 million seen in FY2020.

- NIVEDITA MUKHERJEE

The momentum is expected to continue in FY2025 as well, with a similar estimated YoY growth, aided by rising demand for both leisure and business travel and improving airport infrastructure, says ICRA Ratings which maintains a stable outlook on the Indian aviation industry, amidst the continued recovery in domestic and international air passenger traffic, and relatively stable cost environment.

The international passenger traffic for Indian carriers surpassed the preCOVID levels in FY2023, although it trailed the peak levels of 25.9 million witnessed in FY2019. It is expected to cross this level in the current fiscal, with an estimated 25-27 million passengers, representing a YoY growth of 7-12 per cent. The same is expected to further grow by 7-12 per cent to 2729 million in FY2025. The industry net loss is also likely to decline significantly to Rs 30-40 billion in FY2024 and FY2025 from Rs. 170175 billion in FY2023.

Says Suprio Banerjee, Vice President and Sector Head Corporate Ratings, ICRA. "The industry has witnessed improved pricing power, as reflected in increase in yields and thus the spread between revenue per available seat kilometre cost per available seat kilometre for the airlines.