NEW DELHI: Rating agency ICRA has revised the outlook for the Indian aviation industry to Stable from Negative, given the fast-paced recovery in domestic passenger traffic in FY2023 and the expected continuation of the same in FY2024.
ICRA projects domestic passenger traffic growth at 8-13% in FY2024, post the 55-60% expansion in FY2023, to reach 145-150 million, which is much higher than the pre-Covid levels. During 10M FY2023, domestic passenger traffic, at 111 million, witnessed a YoY increase of 66.2% and trailed the pre-Covid levels (10M FY2020) by only 8.3%.
Suprio Banerjee, Vice President & Sector Head – Corporate Ratings, ICRA, said: “The industry is estimated to report a net loss of Rs 110-130 billion in FY23 due to elevated ATF prices twined with the depreciation of rupee against the dollar.
However, the same is much lower than the net loss of Rs 235 billion in FY22 and ICRA’s earlier estimated net loss of Rs 150-170 billion in FY23, mainly driven by the improved ability of the airlines to shore up their yields without impacting the demand.”
Banerjee added that the net loss is further expected to compress to Rs 50-70 billion in FY2024, as airlines continue to witness healthy passenger traffic growth.