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India’s air passenger traffic likely to witness sharp decline of 45-50% in FY21: ICRA
Jun-04-2020

Ratings agency ICRA in its latest report has said that India’s air passenger traffic is likely to witness sharp decline of 45-50 percent in the current financial year (FY21). It pointed out that with almost negligible air traffic already in the first two months of the current fiscal, possible dilemma amongst travelers to travel amidst continuing coronavirus (Covid-19) pandemic fears and gradual addition of capacities by airlines, passenger traffic at airports is expected to remain under pressure for the first half (April-September) of FY21, with some recovery likely only in H2FY21, on a full year basis.

According to the report, recovery in air travel demand in a meaningful manner is expected towards FY22 and passenger traffic levels of 345 million recorded in the year ended March 2019 are likely to be surpassed only by FY2023. It also said that the aviation infrastructure industry is amongst the most severely impacted by the novel Covid-19 pandemic and the setback on the industry is expected to be substantial in the near term. It also said there prevails considerable uncertainty in air traffic recovery timeline in the wake of subdued demand for air travel for leisure (especially international) by risk averse passengers and likely decline in disposable income in the hands of consumers.

Moreover, the rating agency said factors like dip in business travel due to subdued global macro-economic environment, increasing use of virtual communication modes by business community and possible continuation of travel restrictions, in some form, by various countries have also significantly influenced the overall scenario.

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