Overall Passenger Traffic To Touch Record Highs Of 373-380 Million In FY2024: ICRA

Passenger traffic growth revised upwards to 14-16%, according to ICRA. International passenger traffic is expected to cross pre-Covid level in FY2024; domestic passenger has already surpassed pre-Covid levels.

ICRA expects the overall passenger traffic to touch record highs of 373-380 million in FY2024, translating into a YoY growth of 14-16% over FY2023. This is higher than ICRA’s earlier estimate of 12-14%. Further, the upcoming festive and holiday season is likely to drive passenger growth over the next 4-5 months.

Giving more insights, Vinay Kumar G, Sector Head, Corporate Ratings, ICRA, said: “The improved occupancy in other airlines as well as addition of new routes has largely offset the impact of the Go-First bankruptcy on overall passenger traffic, which is also reflected in a handsome 19% YoY growth in domestic passenger traffic during 7M FY2024. The traffic consistently exceeded pre-Covid levels from April 2023 supported by robust growth in business and leisure travel in the domestic market along with improvement in air connectivity to tier II cities/tourist destinations. Given this, the domestic traffic is expected to reach 110-112% of pre-Covid levels in FY2024. The international traffic recovered to 98% in 7M FY2024 and is expected to cross to pre-Covid levels in FY2024.”

The top five airports (Delhi, Mumbai, Bengaluru, Hyderabad and Cochin), developed under the PPP (public private partnership) model, account for 50–55% of this passenger traffic. Aero revenues of the major private airports recovered to around 85% of pre-Covid levels in FY2023 on the back of higher passenger and aircraft traffic and are likely to reach 107-110% of pre-Covid levels in FY2024. On the other hand, recovery in non-aero revenues is much stronger and is estimated to cross 120% of pre-Covid levels in FY2024, driven by a significant increase in lease rentals with large terminal areas getting added with the completion of expansion at the PPP airports.

Remarking on the credit profile of major private airports, Kumar added: “The revenues for these airports are expected to grow by ~16-18% in FY2024 on the back of increase in passenger traffic growth, ramp-up of non-aero revenues, and increase in tariffs at some of the major airports. Notwithstanding the sizeable capex planned towards capacity expansion in the medium term, ICRA expects the coverage metrics and liquidity position to remain strong for the industry players.”