New Delhi, May 9 (FN Agency) Aviation turbine fuel (ATF) prices, hit by the Russia-Ukraine conflict, continues to be a major threat to the recovery process of the aviation industry, ICRA said on Monday. ”ATF prices have surged by 89 per cent on a Y-o-Y basis in May 2022 given the elevated crude oil prices due to geo-political issues arising from the Russian invasion of Ukraine,” it said. “The rising ATF prices will pose a serious threat to the industry earnings in FY2023. On an aggregate basis, return to normalcy will lead to recovery in passenger load factors, which in turn will aid revenues; however, elevated ATF prices will continue to weigh on the earnings of Indian carriers in FY2023,” it said.
The ratings agency said domestic air travel in April 2022 only 5 per cent lower than pre-Covid levels while international passenger traffic for Indian carriers surpassed pre-Covid levels. For April 2022, domestic passenger traffic is estimated at 10.5 million, Y-o-Y growth of 83 per cent, and only 5 per cent lower than pre-Covid levels. Also, for April 2022, the international passenger traffic for Indian carriers witnessed a surge to 1.85 million, which marginally surpassed pre-Covid levels. Post the waning of Covid-19 infections, domestic passenger traffic has grown 83 per cent on Y-o-Y basis to 10.5 million in April 2022 and is only 5 per cent lower compared to 11.0 million in April 2019 (pre-Covid level).
The airlines’ capacity deployment for April 2022 was 36 per cent higher than April 2021 (81,777 departures in April 2022 against 59,967 departures in April 2021). On a sequential basis, the number of departures in April 2022 were higher by around 2 per cent, given the near normalcy seen in business operations. However, sequentially, the domestic passenger traffic in April 2022 was almost flat compared to 10.7 million in March 2022. Suprio Banerjee, Vice President and Sector Head, ICRA, said: “For April 2022, the average daily departures were at 2,726, notably higher than the average daily departures of 2,000 in April 2021, and higher compared to 2,588 in March 2022.” With resumption of scheduled international operations since March 27, and reversion to bilaterally-agreed capacity entitlements, the international passenger traffic for Indian carriers in April 2022 surged to 1.85 million, which also marginally surpassed the international passenger traffic of 1.83 million of April 2019.