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Rating agency ICRA in its latest report has said that domestic air passenger traffic rose 5 percent to 1.02 crore in August 2022 and a fast-paced recovery in the traffic is expected this fiscal on the back of normalcy in flight operations and widening vaccination coverage. It further said that international traffic for Indian carriers surpassed the pre-COVID level of around 19.8 lakh by 32 percent. 

According to the report, the domestic aviation industry continues to witness recovery, with domestic passenger traffic for August 2022 estimated at around 102 lakh, around 5 percent higher compared to around 97 lakh in July 2022 and around 52 per cent higher in comparison to the domestic passenger traffic in August 2021, although it fell short by around 14 per cent, compared to pre-COVID levels i.e. August 2019. In the first five months of this fiscal, domestic passenger traffic is estimated at nearly 5.24 crore, a year-on-year growth of nearly 131 percent.

The report noted that the airline's capacity deployment in August was around 37 percent, compared to the year-ago period but lower by nearly 10 percent than the pre-COVID level. It also said that a quick recovery in domestic passenger traffic is expected in FY2023, aided by normalcy in operations and a waning pandemic. However, the earnings recovery for domestic airlines will be slow-paced due to elevated ATF prices in addition to the rupee depreciation against the USD amid a heightened competitive environment.