Coronavirus Impact: Air passenger traffic may witness 30% negative growth this fiscal from earlier estimate of 25%, says CARE Ratings

Air passenger traffic is expected to log a 30 percent negative growth during this fiscal from an earlier estimate of a 20-25 percent negative growth amid coronavirus pandemic, rating agency CARE Ratings said on Tuesday

Press Trust of India April 21, 2020 14:16:49 IST
Coronavirus Impact: Air passenger traffic may witness 30% negative growth this fiscal from earlier estimate of 25%, says CARE Ratings

Mumbai: Air passenger traffic is expected to log a 30 percent negative growth during this fiscal from an earlier estimate of a 20-25 percent negative growth amid coronavirus pandemic, rating agency CARE Ratings said on Tuesday.

The agency also expects the airfare to rise in the wake of the social distancing norms.

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All domestic and international commercial passenger flights are suspended since 25 March for the lockdown till 3 May, as of now.

Coronavirus Impact Air passenger traffic may witness 30 negative growth this fiscal from earlier estimate of 25 says CARE Ratings

Representational image. Reuters

"CARE Ratings earlier had given a call of negative 20-25 percent growth during FY21 in terms of airlines passenger growth rate, but given the increase in cases, its rapid spread and with more undetected clusters getting converted into corona hotspots, the tenacity of the end of the pandemic is uncertain and is showing no signs of abating," the agency said in a note.

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Noting that even as a vaccine is yet to be found, lockdowns remain the only way to slow its spread, CARE Ratings said, "we would be revising our earlier estimate and bringing it further down to a negative 30 percent growth in air passenger traffic during FY21."

The passenger volume growth stood at 13.7 percent in the fiscal ended 31 March, 2019, while it spiked 3.7 percent during the April-February period of the last fiscal, it said.

Metros, which are the worst-affected and account for more than half of the passengers handled, the note stated, adding that Delhi Mumbai, Bangalore, Chennai, Kolkata and Hyderabad airports accounted for 63 percent of the passengers handled in the April-January period of the previous fiscal.

Airfares are also expected to increase as aircrafts may accommodate only one passenger per row in order to maintain social distancing, the note stated.

With the extension of the lockdown, the government has directed domestic airlines, most of whom had announced the resumption of services in a phased manner from 4 May and also started bookings, not to take any booking for domestic or international flights until further notice.

"The lockdown which is supposed to end by 4 May, is most likely to get extended as the number of cases is on the rise and certain states are unable to flatten the curve of transmission.

“Even post the lifting of lockdown, passenger growth will face a sharp contraction considering the inhibitions of travelling anywhere till the pandemic scare has been settled fully in the domestic regions and internationally especially on certain routes," CARE Ratings said in the note.

Moreover, with the containment of the virus in the near future, countries including India will not be issuing visas soon fearing the rise of any exigency with the entry of foreign nationals, it said, adding the Covid-19 has put a halt on major business operations which means there will be a considerable fall in income which will also discourage incurring of discretionary expenses like travelling for leisure and tourism.

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