iifl-logo

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

sidebar image

ICRA moderates its FY2022 recovery estimates to 52% of pre-Covid level as against 62% earlier

20 Jan 2022 , 10:46 AM

The easing of restrictions by state governments, healthy pace of vaccination and dip in Covid-19 infections had resulted in healthy sequential domestic passenger traffic growth during June 2021 — December 2021 with the same reaching ~22 million in December 2021 (highest since the start of pandemic in March 2020) and ~88% of pre-pandemic levels (December 2019). However, the recovery trend in passenger traffic was disrupted due to Omicron.

Giving more insights, Mr. Rajeshwar Burla, Group Head, Corporate Ratings, ICRA, says, “During January 1, 2022 to January 17, 2022, the domestic passenger traffic is lower by 34% compared to December 1, 2021 to December 17, 2021. This is due to significant rise in the fresh infections on account of Omicron, which resulted in apprehensiveness to travel, imposition of localised restrictions in key states and consequent slowdown in leisure travel. Major domestic airlines have announced plans of reduction of capacity deployment due to lower demand.

The domestic passenger traffic is likely to witness M-o-M de-growth of 40%-42% in January 2022 and 15%-17% in February 2022 resulting in temporary slowdown in the recovery of domestic passenger traffic in Q4 FY2022. Overall, passenger traffic is expected to be lower by 40%-45% in Q4 FY2022 and the traffic recovery for FY2022 is moderated to 52% of pre-Covid level as against our earlier estimates of 62% of pre-Covid level.”

Due to healthy recovery in passenger traffic post second wave impact and dip in Covid-19 infections, the Directorate General of Central Aviation (DGCA) in November 2021 had announced plans to allow resumption of scheduled international commercial operations from December 15, 2021. However, the new Covid-19 variant, Omicron, has forced the regulator to extend the ban on international commercial operations till January 31, 2022 and is expected to be further extended. Once restrictions are lifted, the recovery of international passenger traffic is expected to happen in a gradual manner and is expected to reach pre-Covid levels only by FY2024.

“The pace of passenger traffic recovery is expected to be sharp and much faster when compared to the second wave of pandemic. As for the airport operators, their strong on balance-sheet liquidity is expected to support their credit profile in the near term. However, the outlook on the airport infrastructure continues to remain Negative. ICRA expects domestic air travel to recover back to pre-Covid levels by FY2023 and the international sector by FY2024. This is factoring in the assumption that impact of future Covid waves (if any) to be low,” Mr. Burla added.

Related Tags

  • covid-19
  • ICRA
  • Omicron
  • pandemic
  • Passenger traffic
  • pre-Covid level
sidebar mobile

BLOGS AND PERSONAL FINANCE

Read More
Knowledge Center
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Capital Services Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Loading...

Follow us on

facebooktwitterrssyoutubeinstagramlinkedintelegram

2025, IIFL Capital Services Ltd. All Rights Reserved

ATTENTION INVESTORS

RISK DISCLOSURE ON DERIVATIVES

Copyright © IIFL Capital Services Limited (Formerly known as IIFL Securities Ltd). All rights Reserved.

IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)

ISO certification icon
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.