Tag Archives: India Ratings and Research

Recovery in domestic and international travel has been delayed by three and six months, respectively, due to COVID resurgence, says India Ratings and Research (Ind-Ra). Besides, 2021 has brought three new challenges such as higher fuel expenses, rising competition intensity, and likely pressure on airline yields as the scramble for market share realignment to pre-COVID period begins.

The overall air passenger volumes (pax) have been consistently increasing and are likely to reach 310 million by FYE18, says India Ratings and Research (Ind-Ra). This will be driven by the aspirations of the middle class to travel in flights and a reduction in price differential between air travel and rail journey, including the recently increased cancellation fees for train tickets. The slowdown in economic growth during the first half of the current decade had minimal impact on pax growth. However, the 2008 global economic crisis and fuel and currency crises in FY13 had a pronounced impact on air traffic growth. The gradual increase in private final consumption expenditure has been buttressing India’s pax growth since early FY14. Ind-Ra’s sensitivity on economic growth also underlines the strong underlying fundamentals and continued growth in pax volumes. Ind-Ra’s also reports that large gateways such as Mumbai and Delhi airports and mid-market airport hubs such as Bengaluru and Hyderabad airports have displayed strong volume resilience, despite unfavourable macroeconomic trends.