Air traffic growth hits 5-year low in FY19 at 11.6%; cargo at 6%

Photo: Shutterstock

The pace of growth in air traffic hit a five-year low at 11.6 percent in fiscal 2019, pulled down by low growth of 3.9 percent in the March quarter as against a healthy 14.9 percent in the first three quarters.

Cargo traffic growth also moderated in the year to 6 percent, as against double-digits growth witnessed over the past two years.

According to Icra, domestic passenger traffic declined by 1.1 percent in March, overall traffic saw a de-growth of 0.1 percent in the month as international aircraft movement dipped by 1 percent while domestic aircraft movement was flat.

The de-growth in March was the first since February 2013, the agency said Thursday.

The passenger traffic movement at the four key airports reported a sharp decline in March as travel demand in the Delhi and Mumbai airports de-grew 9.4 percent and 16.2 percent, respectively. Similarly, Chennai saw a 7.4 percent de-growth and Kochi degrew by 11.3 percent in March.

"After years of strong growth, air traffic growth has hit a low with passenger traffic declining by 1.1 percent in March. This has dragged down the full year passenger traffic growth to 11.6 percent, making it the lowest in the past five years," Icra said.

Overall aircraft movement grew by 12.1 percent, while cargo traffic increased by 6 percent in the year.

Between FY15 and FY18, the air traffic grew an annualized rate of 17.5 percent. But this has been arrested of FY19. "This can impact revenue and margin of airports at a time when many of them are undertaking large capex," said Harsh Jagnani of Icra said.

The decline in passenger traffic follows the increase in airfares due to lower number of flights owing to multiple issues, he aid.

Noting that Bengaluru, Hyderabad, Ahmedabad, Guwahati, and Goa have maintained growth momentum, Icra said overall, the metros airports de-growing.

According to the agency, cargo traffic growth also moderated to 6 percent in FY19, as against double-digits growth witnessed over the past two years.

The slowdown was primarily driven by the international cargo segment, which accounts for 62 percent of the total cargo traffic, and grew only 2.6 percent in FY19 as against 15.6 percent in FY18.

On the other hand, domestic cargo traffic had a robust growth of 12 percent in FY19 up from 8.1 percent in FY18.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel