Air traffic growth hits 5-yr low in FY19 at 11.6%

Air traffic growth hits 5-yr low in FY19 at 11.6%
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Cargo traffic growth also moderated in the year to 6 per cent, as against double-digits growth witnessed over the past two years, says rating agency Icra

Mumbai: 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 per cent, as against double-digits growth witnessed over the past two years.

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

The de-growth in March was the first since February 2013, the agency said on 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 per cent and 16.2 per cent, respectively.

Similarly, Chennai saw a 7.4 per cent de-growth and Kochi de-grew by 11.3 per cent in March.

"After years of strong growth, air traffic growth has hit a low with passenger traffic declining by 1.1 per cent in March.

This has dragged down the full year passenger traffic growth to 11.6 per cent, making it the lowest in the past five years," Icra said.

Overall aircraft movement grew by 12.1 per cent, while cargo traffic increased by 6 per cent in the year. Between FY15 and FY18, the air traffic grew an annualized rate of 17.5 per cent. 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 said.

Icra noted that Bengaluru, Hyderabad, Ahmedabad, Guwahati, and Goa have maintained growth momentum.

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