The Indian aviation industry has witnessed a continued recovery in domestic passenger traffic in January 2021. However, the pace of growth slowed down in January 2021, with a sequential growth (over December 2020) of ~3.5% to ~76 lakh passengers. The capacity deployment in January 2021 at ~71% (vis-a-vis January 2020) is a significant increase over the ~59% capacity deployed in November 2020 and ~67% in December 2020. On a YoY basis, however, domestic passenger traffic declined by ~41%.

According to Ms. Kinjal Shah, Vice President, ICRA: “The number of flights departing has also gradually increased from 416 on Day 1 to 2,294 on Day 240 (January 18, 2021). For January 2021, the average daily departures were ~2,190, significantly lower than the average daily departures of 3,080 in January 2020, though better than ~2,048 in December 2020. The average number of passengers per flight during January 2021 was 111, against an average of 134 passengers per flight in January 2020. Thus, it is expected that the domestic aviation industry operated at a passenger load factor (PLF) of ~72% in January 2021, against 86.0% in January 2020, that too on a low capacity. The PLF for January 2021 was lower than the ~74% in December 2020, due to the increase in capacity deployment by ~7%. Overall, from May 25, 2020 till January 31, 2021, domestic passenger traffic has been pegged at ~37.7 million.”

The Ministry of Civil Aviation (MoCA) permitted increasing the capacity to 45%, with effect from June 27, 2020; post the initial recommencement of operations of the scheduled domestic flights, with effect from May 25, 2020 to a limited extent i.e. a maximum 1/3rd of their respective approved capacity of the Summer Schedule 2020. It further permitted increasing the capacity to 60%, with effect from September 02, 2020 to 70%, with effect from November 11, 2020 and further to 80% with effect from December 03, 2020.

While the scheduled international operations are yet to start, the MoCA has permitted international operations under the Vande Bharat Mission (VBM) and Air Transport Bubbles (ATB). Under the VBM for evacuation of Indian citizens from foreign countries, which started from May 07, 2020, the international passenger traffic (inbound and outbound) for Indian carriers has been ~22 lakh for the period May 07, 2020 to January 31, 2021. For January 2021, international passenger traffic for Indian carriers under VBM was recorded at ~4.3 lakh, a sequential improvement of ~39.1%.

As for the aviation turbine fuel (ATF) prices, following the pandemic, crude oil prices declined materially – reaching a low of ~US$19/ barrel in April 2020, thus leading to a decline in ATF prices. However, the crude oil prices have increased gradually since then, and currently ranges at around US$59/ barrel. Consequently, the ATF prices increased sequentially by 24.1% in July 2020 and by 4.2% in August 2020. However, it declined sequentially by 3.4% in September 2020 and by 5.6% in October 2020, before increasing by 4.6% in November 2020, by 9.1% in December 2020, by 10.2% in January 2021 and by 5.4% in February 2021. The February 2021 prices are still lower by 16.0% on a YoY basis. The prolonged shutdown of manufacturing activities in several countries and the subsequent impact of the pandemic on the global economic activity will keep the crude oil prices and thus the ATF prices low.