Hit by the third wave of the pandemic that led to massive cancellations of domestic flights and extension of the ban on scheduled international flights till the end of the next month, the airports are set to see a 10-percentage-point fall in their revenue recovery this fiscal to 52 per cent of the pre-pandemic level, according to a report.
“Given the massive disruptions to domestic passenger traffic and the extension of the ban on regular international flights, we moderate our revenue recovery estimates for airports to 52 per cent of pre-COVID-19 level as against 62 per cent earlier for the current fiscal,” ICRA said in a note without offering absolute revenue numbers.
Domestic passenger traffic is likely to witness a month-on-month de-growth of 40-42 per cent in January and 15-17 per cent in February resulting in a temporary slowdown in the recovery of domestic passenger traffic in the fourth quarter, the agency said.
“Overall, passenger traffic is expected to be lower by 40-45 per cent in Q4 FY22, leading to an overall recovery of a moderate 52 per cent of the pre-COVID-19 level as against our earlier estimates of 62 per cent of pre-COVID-19 level,” the agency said.
However, it sees a strong rebound compared to the second wave of the pandemic once the situation normalises, as it expects that the easing of restrictions by states, healthy pace of vaccination and a dip in the infection caseloads had resulted in healthy sequential domestic passenger traffic growth during the June-December 2021 period.
The domestic passenger traffic reached 22 million in December 2021, which is the highest since the pandemic began in March 2020, and 88 per cent of the pre-pandemic levels in December 2019. From January 1 to January 17, 2022, domestic passenger traffic was lower by 34 per cent compared to December 1-December 17, 2021. This is due to a significant rise in fresh infections, resulting in the fear of travel, imposition of localised restrictions in key states and the consequent slowdown in leisure travel forcing major airlines to reduce capacity deployment.
Due to a healthy recovery in passenger traffic after the second wave and a dip in coronavirus infections, the Directorate General of Central Aviation (DGCA) had in November 2021 announced plans to allow resumption of scheduled international flights from December 15, 2021.
But, the Omicron variant has forced the regulator to first extend the ban to January 31, and then to February 28, 2022. Once these restrictions are lifted, the recovery of international passenger traffic is expected to happen in a gradual manner and may reach pre-COVID-19 levels only by FY24.