During 10M FY2023, domestic passenger traffic, at 111 million, witnessed a YoY increase of 66.2% and trailed the pre-Covid levels (10M FY2020) by only ~8.3%.

ICRA projects domestic passenger traffic growth at 8-13% in FY2024, post the 55-60% expansion in FY2023, to reach 145-150million, which is much higher than the pre-Covid levels.

ICRA has revised the outlook for the Indian aviation industry to Stable from Negative, given the fast-paced recovery in domestic passenger traffic in FY2023 and the expected continuation of the same in FY2024. Moreover, the industry has witnessed improved pricing power, as reflected in the healthier yields and thus the revenue per available seat kilometer- cost per available seat kilometer (RASK-CASK) spread of the airlines. 

The same is expected to continue, given the sequential decline in aviation turbine fuel (ATF) prices from the peak of June 2022 and the anticipation of relatively stable foreign exchange rates.

ICRA projects domestic passenger traffic growth at 8-13% in FY2024, post the 55-60% expansion in FY2023, to reach 145-150million, which is much higher than the pre-Covid levels. During 10M FY2023, domestic passenger traffic, at 111 million, witnessed a YoY increase of 66.2% and trailed the pre-Covid levels (10M FY2020) by only ~8.3%.