International Air Transport Association (IATA) has recently revised its traffic projections for 2020. The new projections note a sharp decline in passenger demand, currently at 66 percent for 2020. The global aviation body had previously projected a 63 percent decline. 

The passenger demand in August continued to be way below normal levels

Reports state, “Based on flight data, the recovery in air passenger services was brought to a halt in mid-August by a return of government restrictions in the face of new COVID-19 outbreaks in a number of key markets.”

Asia Pacific has the largest share in the global aviation market of 34.6 percent. This figure was relatively lesser impacted other markets such as North America, Europe, Middle East, Africa, and Latin America. in August in terms of RPKs (revenue passenger kilometers). RPKs are the number of kilometers travelled by paying passengers.

However, in India, the average daily passenger traffic has risen

Here in India, the average daily passenger traffic has increased from about 90,000 in August to 1.25 lakh in September. But these numbers are still quite lower than the daily passenger numbers before the pandemic. 

Kinjal Shah, Vice President of ICRA, a credit rating agency, said, “The daily passenger traffic is growing on a weekly and monthly basis. We had expected first-quarter [of 2020/21] to be a complete washout followed by marginal traffic in the second quarter. As per our expectations, the third quarter is likely to see some recovery, and the maximum recovery would happen from January onwards.”

Current air traffic is largely driven by people who are travelling to their hometowns or for work

As per experts, business and leisure traffic hasn’t come back yet. For the aviation industry to start its recovery, these two segments have to resume thus contribute to the overall demand. 

An aviation consultant said, “How the third quarter pans out depends a lot on the business and leisure demand. If October doesn’t see significant recovery, it will be against the estimates of most analysts.”

In September, the Ministry of Civil Aviation had revised the capacity constraints for domestic carriers to 60 percent from the earlier 33 percent. By increasing this capacity, the ministry wants airlines to fly more passengers.

For FY21, the ICRA has estimated the domestic passenger traffic to drop between 41 percent and 46 percent. International traffic will also drop between 60 and 70 percent.

India is still grappling with the first phase of the pandemic but still early signs of recovery are visible. The next three months will be important for the aviation sector here and globally to continue its recovery.

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