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Passenger traffic at airports to double to 600 million by FY2024
For fiscal 2020, CRISIL Research expects airport passenger traffic to grow 6-8% on account of slow growth in domestic and international passenger traffic, led by grounding of Jet Airways, third-largest player in the industry in fiscal 2019, accounting for 21% of total capacity. With the grounding of operations by Jet Airways, slots of the airline at metro airports are being reallocated to other players. However, final picture of the industry will emerge only post finalisation of bids for the airline.
Our current forecast for fiscal 2020 assumes resumption in operations of Jet Airways with about 30-40% of the capacity of fiscal 2019.
The impact of grounding Jet Airways will be more pronounced in international passenger traffic compared to domestic passenger traffic on account of its higher share among domestic carriers in international traffic. As of fiscal 2019, Jet Airways accounts for 33% of total RPKM of domestic carriers on international routes.
Additionally, due to the safety issue of Boeing 737 Max, the aircraft has been grounded. As a result, 13 Boeing 737 Max aircraft operated by SpiceJet have also been grounded since March, 2019. While Boeing has released a software fix for the issue and carried out several test flights, Federal Aviation Administration (FAA) plans to review the flight control software along with nine other aviation regulators over next three months. This is expected to prolong their grounding till Q2 FY20, along with constraints in expanding capacity.