Domestic Air Passenger Traffic Sees 6.3% Rise In October, Industry Faces Ongoing Supply Chain And Engine Issues

Domestic air passenger traffic in India grew to 138.5 lakh in October, a 6.3% increase from 130.3 lakh in September. This marked a 9.6% year-on-year rise and a 12.8% increase over October 2019’s pre-COVID level of 122.8 lakh, as reported by ICRA.

Year-on-Year Growth and Capacity Expansion

From April to October, domestic air passenger traffic reached 932 lakh, reflecting a 5.9% growth. Indian carriers also saw 162.6 lakh international passengers in the first half of FY25, up by 16% from last year. October 2024 saw airlines increasing capacity by 7.6% year-on-year and 5.2% over September 2024.

The report from ICRA expects steady growth in domestic air passenger traffic. It also foresees a stable cost environment for FY25, indicating a positive outlook for the aviation sector.

Industry Challenges Due to Grounded Aircraft

Despite the growth, the industry faces challenges. Issues with Pratt & Whitney (P&W) engines continue to impact airlines. In FY24, Go Airlines grounded half of its fleet due to faulty P&W engines. IndiGo had over 70 aircraft grounded as of September 30. By June 30, about 134 aircraft, or 15-17% of the total fleet, were grounded, limiting industry capacity.

ICRA expects a slow recovery in earnings due to high fixed costs. Net losses for FY2025 and FY2026 are estimated at Rs 20-30 billion, impacted by elevated aviation fuel costs and pressure to maintain high passenger load factors.

Also Read: Sensex Plunges 849 Points Ahead Of Key US Fed Meet