Air traffic growth hits 5-year low in FY19

According to Icra, domestic passenger traffic declined by 1.1 per cent in March, overall traffic saw a de-growth of 0.1 per cent in the month as international aircraft movement dipped by 1 per cent while domestic aircraft movement was flat.

The pace of growth in air traffic hit a five-year low at 11.6 per cent in fiscal 2019, pulled down by low growth of 3.9 percent in the March quarter as against a healthy 14.9 percent in the first three quarters.

Cargo traffic growth also moderated in the year to 6 per cent, as against double-digits growth witnessed over the past two years.

According to Icra, domestic passenger traffic declined by 1.1 per cent in March, overall traffic saw a de-growth of 0.1 per cent in the month as international aircraft movement dipped by 1 per cent while domestic aircraft movement was flat.

The de-growth in March was the first since February 2013, the agency said on Thursday.

The passenger traffic movement at the four key airports reported a sharp decline in March as travel demand in the Delhi and Mumbai airports de-grew 9.4 percent and 16.2 per cent, respectively.

Similarly, Chennai saw a 7.4 per cent de-growth and Kochi de-grew by 11.3 per cent in March.

"After years of strong growth, air traffic growth has hit a low with passenger traffic declining by 1.1 per cent in March.

“This has dragged down the full year passenger traffic growth to 11.6 per cent, making it the lowest in the past five years," Icra said.

Overall aircraft movement grew by 12.1 percent, while cargo traffic increased by 6 per cent in the year.

Between FY15 and FY18, the air traffic grew an annualised rate of 17.5 per cent.

But this has been arrested of FY19.

"This can impact revenue and margin of airports at a time when many of them are undertaking large capex," said Harsh Jagnani of Icra said.

The decline in passenger traffic follows the increase in airfares due to lower number of flights owing to multiple issues, he said.

Noting that Bengaluru, Hyderabad, Ahmedabad, Guwahati, and Goa have maintained growth momentum, Icra said overall, the metro airports saw lower growth.

According to the agency, cargo traffic growth also moderated to 6 per cent in FY19, as against double-digits growth witnessed over the past two years.

The slowdown was primarily driven by the international cargo segment, which accounts for 62 per cent of the total cargo traffic, and grew only 2.6 per cent in FY19 as against 15.6 per cent in FY18.

On the other hand, domestic cargo traffic had a robust growth of 12 per cent in FY19 up from 8.1 per cent in FY18.

Photograph: PTI Photo