Will the FPO fund infusion solve Vodafone Idea’s problems?
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Domestic air passenger traffic in India increased marginally by 2 to 3% in September at around 69 lakh as against 67 lakh in August, credit ratings agency Icra said in a report on Wednesday. The air passenger traffic growth was at around 74% in September as compared to the same month the previous year. Airlines witnessed around 61,000 departures in the given month as compared to 39,628 departures in the same month in the previous year.
The number of departures on a sequential basis in the month touched a high of 6%, as Covid-19 demonstrated a downward trajectory. Also, local carriers operated at a higher capacity of 54% in September 2021 as compared to the same month last year.
Aviation turbine fuel increased by 78.6%
With the onset of the festive season, the increase in permitted capacity to 85% is a step in the right direction, the ratings agency said.
Further it added that the reduction in fare cap roll period to 15 days from 30 days is a move towards market driven pricing as applicable in the pre-Covid times, where actual demand-supply dynamics and real passenger load factors determined the pricing.
On a YoY basis, Icra said that prices of aviation turbine fuel have seen a sharp hike of 78.6% till October 2021 and attributed it to increase in crude oil prices, coupled with low capacity utilisation of aircraft fleet will continue to weigh on financial performance of Indian carriers in FY 2022.
It added that, the credit profile of most Indian carriers continued to be characterised by a weak liquidity position.