Domestic air passenger traffic sees 9% YoY growth in July 2024, surpasses pre-Covid levels, BA

The Indian aviation industry continues its recovery, with domestic air passenger traffic for July 2024 reaching approximately 131.4 lakh passengers, marking a year-on-year (YoY) growth of 9 per cent. This figure is not only a significant increase from July 2023 but also reflects a 10 per cent rise compared to pre-Covid levels in July 2019, according to the latest report by ICRA.

However, when compared to June 2024, there was a slight dip of 0.5 per cent in passenger numbers, down from 132.1 lakh. Despite this, the overall growth trajectory remains positive, with the first four months of FY2025 (April to July 2024) registering a total of 533.4 lakh domestic passengers. This represents a 5.2 per cent increase from the same period in FY2024 and a notable 13.2 per cent growth compared to pre-pandemic levels in FY2020.

On the international front, Indian carriers witnessed robust growth, with passenger traffic in Q1 FY2025 reaching 80.5 lakh, a 16.7 per cent YoY increase compared to the previous fiscal year and an impressive 48.7 per cent surge over pre-Covid figures.

The industry also saw a marginal increase in capacity deployment, with July 2024 recording a 5 per cent rise compared to July 2023, and a slight 0.2 per cent increase from June 2024. The passenger load factor (PLF) remained strong at around 87 per cent in July 2024, up from 84 per cent in July 2023 and 82 per cent in July 2019, indicating better utilization of available seats.
Jet fuel prices, a critical cost component for airlines, saw a marginal rise in July and August 2024, with increases of 0.6 per cent and 0.9 per cent respectively on a sequential basis. Despite these increases, prices in August 2024 were lower by 2.2 per cent compared to the same month last year.Despite these positive trends, ICRA cautions that the Indian aviation industry is expected to report a net loss of INR 30-40 billion in FY2025, mirroring the losses seen in FY2024. This is a significant improvement from the INR 170-175 billion losses recorded in FY2023. The key to improving profitability lies in the airlines’ ability to raise yields in proportion to rising input costs.

As the Indian aviation sector navigates its post-pandemic recovery, the focus will remain on maintaining growth momentum while managing costs effectively to achieve long-term financial stability.