It also said that the airport operators are expected to see their traffic volume recover to the pre-pandemic (fiscal 2020) level this fiscal, spurring a recovery in revenue, supported by an increase in tariffs.
In FY23, with the pandemic impact seemingly behind us, air traffic volume is expected to increase to the fiscal 2020 level of around 340 million passengers.
In the first five months (till August), the volume was around 88 per cent of the corresponding fiscal 2020 level, but is expected to pick up in the remaining months of the year on account of improving business travel sentiment, pent-up demand on the international segment and de-bottlenecking of capacity availability on aircraft and international slots, it said.
“In the first five months of this fiscal, domestic traffic stood at 92 per cent of the corresponding fiscal 2020 mark, while international traffic was at 75 per cent. This cements our confidence for healthy volume growth in the current fiscal and a return to near-double-digit growth next fiscal,” said Manish Gupta, senior director at Crisil Ratings.
This fiscal, traffic volume is expected to recover to the pre-pandemic level, implying a robust growth of 75 per cent over the fiscal 2022 level, he added.
The report noted that the revenue recovery is crucial to support rising debt-servicing requirements as private airports are at the end of their expansion phase.
Between fiscal 2015 and 2020, air traffic logged a healthy compound annual growth rate of around 12 per cent, driven by growing penetration of air travel beyond metro cities on tailwind from the government schemes, such as RCS and UDAN1 and focus on infrastructure development, as per the report.
Then the pandemic hit, and air traffic volume nose-dived in fiscal 2021. Fiscal 2022 saw only partial recovery (at 55 per cent of fiscal 2020 traffic), given the multiple waves of infection and restrictions on the movement of people, according to Crisil.
It also said that the aeronautical tariffs have increased by around 30 per cent for the top four private airports, which will help aeronautical revenue reach 120 per cent in FY23.
The air traffic recovery estimates and revenue projections remain sensitive to macroeconomic uncertainties and geopolitical developments, the agency noted.