Aviation sector may rebound by FY 2023

Kotak Institutional Equities has observed in its report that the airline business stands a good chance to regain pre-COVID levels of traffic by FY 2023. This is on account of new routes that did not exist some four years back and through gains from existing rail routes. Non-metro to non-metro traffic accounted for the new routes, rising from 5% to 10% over 3 years.

Airlines covered domestic 1,154 routes (including return journeys) in March 2021 as compared to 1,033 routes a year ago. At the same time, new routes started by airlines in FY21 yielded 230,000 new journeys in March 2021 versus March 2020 or 2.8 million new journeys on an annualised basis. This marks a 2% growth over pre-Covid base of annual domestic air volumes.

Recently, Ronojoy Dutta, CEO of Indigo Airlines, also stated that it may take anywhere between 18 and 24 months for recovery from the present situation and come back to the pre-Covid levels of travel demand. He added that air travel is the safest mode of travel as the chances of transmission of the virus from one passenger to another onboard are very low.

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