India is in the process of becoming a key global aviation market and was just 2.2% shy of reaching pre-pandemic levels (measured un passenger revenue kilometres (PRK) by February, the latest market analysis report by the global airlines trade association IATA (Internation Air Transport Association) shows.
India's aviation market led other thriving markets like the U.S., China, and Japan in the passenger load factor (PLF) at 81.6% in February 2023 vs 85.2% in January 2022.
Domestic airlines in India recorded 51.7% year-on-year passenger growth in January-March 2023, the latest Directorate General of Civil Aviation (DGCA) data showed. The airlines carried 375.04 lakh passengers as of March 2023 vs 247.23 lakh in the year-ago period, while the growth on a month-on-month basis stood at 21.41%.
The passenger load factor (PLF) for various airlines in March 2023 shows SpiceJet recording the highest PLF at 92.3%, followed by Vistara at 91.6%, and Go First at 90.2%, the DGCA said.
Global air connectivity also continues to recover in 2023, says IATA. As of March 2023, the overall international air connectivity stood at 79% of its pre-pandemic level, demonstrating a steady improvement despite a slowdown in economic activity through 2022 and into the start of this year.
Asia-Pacific continues to lag the recovery in the other regions, at a more modest 62% of its 2019 level in March. Having said that, there has been a strong increase – of 40 percentage points (pp) – in Asia Pacific international air connectivity over the past year..
Overall, international air connectivity has recovered more rapidly than domestic over the past year, it adds. Global air connectivity has grown by 27pp as compared with 10pp for the latter. "This increase primarily reflects the relatively low level of international connectivity in early 2022 and the surge of international travel demand driven by the reopening of international travel markets, which gained momentum through the year."
Other regions showed broad-based recovery. Africa emerged as the strongest performer where international air connectivity exceeded its 2019 level and was at 104% in March 2023.
The international body, in its latest commentary on airfares, also said airfares have recovered amid soaring jet fuel costs and inflation. Airline ticket prices have only just caught up with the average inflation rate in the OECD (Organisation for Economic Co-operation and Development), and remain significantly below the inflation seen in jet fuel prices. This is especially challenging for airlines considering the cost of jet fuel accounts for 25% to 30% of their operating costs, it says.
In the meantime, says IATA, the pent-up demand after the easing of travel restrictions continues to unwind. As a result, the increase in airline ticket prices has been outpacing overall inflation globally only recently and matched OECD CPI compared to pre-pandemic levels at the end of February.