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Air traffic could fall by 30% this fiscal

Air passenger traffic is expected to decline by around 30% in the present fiscal compared to a previous estimate of 20-25% negative growth. Besides this, air fares are also expected to rise, as airlines will be compelled to adhere to social distancing guidelines. This projection was given by CARE Ratings in its note that said, “CARE Ratings earlier had given a call of negative 20-25% growth during FY21 in terms of airlines passenger growth rate, but given the increase in cases, its rapid spread and with more undetected clusters getting converted into corona hotspots, the tenacity of the end of the pandemic is uncertain and is showing no signs of abating.” It added that as long as the vaccine is not developed, lockdowns remain the only way to slow the spread of COVID-19.

Passenger volume growth stood at 13.7% in the fiscal year ending March 31, 2019, whereas it increased by 3.7% during the April-February period of 2019-20. Metros are the worst-affected as they account for more than half of the passengers
handled, the note stated, adding that Delhi, Mumbai, Bangalore, Chennai, Kolkata and Hyderabad airports accounted for 63% of the passengers handled in the April-January period of the previous fiscal. Moreover, airlines may be compelled to accomodate only one passenger per row, which may lead to increase in fares. Moreover, countries across the world, including India, are expected to restrict visas severely for the coming months, even if the pandemic is controlled domestically. That could imply considerable drop in income, especially as discretionary expenses like travelling for leisure and tourism get curbed.