It has been a turbulent couple of years for the Indian aviation sector. And despite revenge travel, the recovery hasn't been a quick one. Airlines are yet to hit pre-pandemic levels on the number of passengers ferried, with the load still lower than FY21. 

Pre-Covid, average daily fliers were 4 lakh passengers. The latest data suggests that daily traffic reached 3.6 lakh fliers as of March 26, 2022. Although the average number of travellers surged to 137 from 126 in March 2022, the third wave dampened this trend, the Director General of Civil Aviation’s monthly data shows.

In February 2022, Interglobe Aviation (IndiGo), Air India, Go First (formerly GoAir), Spicejet, and Vistara saw a substantial rise in passengers carried. However, IndiGo’s market share fell by 411 bps MoM, to 51% as competitors Air India, SpiceJet and Vistara ate into its market share. Vistara in particular has seen an increase in market share by 226 bps MoM to 9.73%.

However, an increase in the price of aviation turbine fuel (ATF) might pose a problem for all airlines. Unlike other sectors, where price hikes are taken to offset the rise in input costs, aviation companies cannot increase fares indiscriminately. According to a report by ICICI Securities, revenue per available seat-kilometre (RASK) in Q3FY22 was Rs 3.51, which is already higher than Rs 2.70 in FY11, when fuel prices were $100-$110 per barrel. So the option of increasing fares is very limited.

With the government re-starting international flights from March 27, 2022, demand is set to go up, causing a surge in the number of passengers carried. Reports suggest that since daily traffic increased in March 2022, DGCA approved 25,309 departures every week starting the last week of March. If the demand continues to jump, airlines might be able to mitigate the rise in ATF cost and come out of the red in FY23.