With passenger numbers higher in January, considered a ‘lean month’ than even those during the ‘holiday rush’ of December, India’s aviation industry has proved yet again that its flight path is firmly ‘up, up and away’. The recovery since Covid seems to be going from strength to strength, with foreign arrivals also picking up at a steady pace.
According to rating consultant ICRA, domestic air passenger traffic in India continued its upward trend last month with an estimated 1.5 crore passengers, which is a 0.7 per cent increase over December, which along with summer holidays, constitutes the peak travel time of the year thanks to holidays, Christmas festivities and New Year’s.
Compared to January last year, the increase is a significant 14.5 per cent.
International arrivals also showed strong performance, with 2.4 crore passengers this financial year so far, a 14.5 per cent jump compared to the same period previous year, and a substantial 41.7 per cent rise compared to pre-Covid levels.
Airlines also pitched in, by not reducing their capacity levels after the peak December rush, perhaps anticipating that the traffic will remain solid into the new year. So, capacity deployment in January 2025 increased by more than 10 per cent compared to January in the previous years. And boy, were they rewarded, with a passenger load factor of more than 92 per cent in January 2025.
It also helped that aviation fuel prices were lower by more than 8 per cent last month compared to previous years.
However, the annual outlook remains balanced, mainly due to the moderate domestic passenger traffic through summer and monsoon seasons in the present financial year, thanks to a long drawn out election season, stifling summer heat and other weather-related disruptions.
But when it comes to international traffic, the outlook is rosy, with a growth of as much as 20 per cent expected in 2025.
“The outlook for the Indian aviation industry remains stable, driven by expectations of moderate growth in domestic air passenger traffic and a relatively stable cost environment in FY2025. Moreover, the industry witnessed improved pricing power during FY2024, reflected in the higher yields (over pre-Covid levels) and the revenue per available seat kilometre–cost per available seat kilometre (RASK–CASK) spread of the airlines,” according to the ICRA report.
