Indian aviation sector to touch 80% of pre-covid capacity in Q3: Morgan Stanley
Premium- 'We believe that there is a significant pent-up leisure travel demand in the system and swift vaccination drive can aid the return of such demand'
New Delhi: The Indian aviation industry will bounce back to 80% of pre covid capacity during October-December as about 9.2 crore domestic passengers are expected to take to the skies during this financial year 2022, Morgan Stalney Research said in a recent report. Around 14.4 crore passengers are likely to travel by air during FY2023.
"Overall, we estimate 92 mn (9.2 crore) domestic passengers in India in FY22 vs 141 mn (14.1 crore) in FY20," the report said adding that India can witness 50%, 65%, 83% and 90% of average pre-Covid capacity in Q1, Q2, Q3 and Q4, respectively, assuming that there is no further impact from the pandemic.
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The government earlier in July allowed airlines to sell seats up to 65% of their total capacity on domestic flights, up from 50%.
Air traffic picked after lockdown was lifted in May 2020, and rose every month till March 2021 before the second wave of covid-19 hit the country.
In May, the government set a cap stating that airlines will be able to sell seats up to 50% of their total capacity on domestic flights citing high number of covid-19 infections and as travel demand fell during the second wave.
However, air passenger traffic has gradually risen since then.
Air passenger traffic in India rose for the sixth straight week during the week ended 10 July as a fall in covid-19 cases and easing of curbs by most states led more people to take to the skies.
The average number of daily fliers rose to 150,000 for the week ended 10 July, from 135,000 fliers a week before, brokerage firm ICICI Securities said in a report.
The average number of departures rose to 1,486 during the week, from 1,408 in the previous week. The number of fliers per departure was improved to 100 from 95 during the previous week.
"As vaccination rollouts continue across the world, key markets are seeing a sharp rebound in domestic air travel," Morgan Stanley said in the report.
"With the second wave appearing to ebb, airline passenger traffic is again seeing a modest recovery. Over the past week, daily airline passenger traffic reached an average of about 140k (140,000), implying about 36% of pre-Covid traffic (about 175k passengers on July 4, 2021, implying about 44% of pre-Covid levels)," the report said.
"We believe that there is a significant pent-up leisure travel demand in the system and swift vaccination drive can aid the return of such demand," it added.
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