Indian Carriers' International Traffic Falls 39% Amid West Asia Conflict: Equiru ...
Geopolitical tensions in West Asia continued to weigh on India's aviation sector in April, hurting international travel demand, reducing aircraft utilisation and adding to cost pressures already exacerbated by elevated fuel prices and a weaker rupee, according to a report by Equirus.The brokerage said the ongoing conflict in West Asia disrupted international operations, affecting passenger traffic, capacity deployment and overall industry profitability. While global fuel prices moderated from the previous month, they remained significantly higher than a year earlier, keeping pressure on airline earnings.
Brent crude averaged about USD 92 per barrel in May, up 44 per cent year-on-year despite a 19 per cent month-on-month decline, while Singapore jet fuel prices were about USD 128 per barrel, up 65 per cent from a year ago, Equirus said.
At the same time, the Indian rupee remained weak at around 95 against the U.S. dollar, representing an 11 per cent depreciation from a year earlier. The weaker currency increased dollar-linked expenses such as aircraft lease rentals and maintenance costs, the report said.
Domestic aviation demand also remained subdued. Passenger traffic in April fell 3 per cent year-on-year and 4 per cent from the previous month to about 13.9 million passengers. Revenue passenger kilometres (RPKs), a measure of passenger traffic, declined 2 per cent year-on-year to 13.7 billion.
Although airlines continued to add capacity, available seat kilometres (ASKs) rose about 3 per cent from a year earlier, demand growth failed to keep pace. Flight departures declined 1 per cent year-on-year to about 97,600, while passenger load factor (PLF), a measure of seat occupancy, dropped to 82.0 per cent from 86.1 per cent a year earlier.
Equirus said the decline in load factors reflected weak demand conditions and mounting pressure on airline yields.
Severe Impact On International Operations
International passenger traffic carried by Indian airlines fell 39 per cent year-on-year to around 1.8 million passengers in April, while RPKs dropped 33 per cent to 7.2 billion. Flight departures were down 37 per cent compared with a year earlier despite a marginal sequential recovery.
Airlines continued to rationalise international capacity, with ASKs declining 28 per cent year-on-year. However, demand weakened faster than capacity reductions, pushing international PLF down sharply to 75.5 per cent from 81.7 per cent a year earlier.
"The adverse impact of the West Asia conflict continued through April, affecting both traffic volumes and network efficiency," Equirus said.
Despite the challenging operating environment, competitive dynamics in the domestic market remained broadly stable.
IndiGo strengthened its dominance in the domestic market, increasing its passenger market share to 64.8 per cent in April from 64.0 per cent a year earlier. Akasa Air also expanded its share to 5.7 per cent from 5.0 per cent.
In contrast, Air India Group's domestic passenger market share fell to 24.9 per cent from 27.3 per cent a year ago.
Akasa Air recorded the highest domestic load factor among major airlines at 91.8 per cent, significantly ahead of the industry average of 82.0 per cent. IndiGo maintained the strongest operational performance, achieving an on-time performance of 88.5 per cent.
In the international segment, market share trends shifted back in favour of IndiGo. The airline's share of international passengers carried by Indian operators rose to 47.5 per cent, while Air India Group's share declined to 46.6 per cent. Akasa Air increased its international market share to 3.2 per cent.
However, load factors weakened across major international operators, underscoring continued demand disruption linked to geopolitical tensions, the report said.
Equirus added that domestic aviation turbine fuel prices averaged about Rs 105,600 per kilolitre in April, up 18 per cent year-on-year and 9 per cent month-on-month, although government intervention helped limit the pass-through of global fuel inflation into domestic fuel prices.
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