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India Raises Cap on Domestic Flights from 60% to 70%

by Ajay Prakash

India’s National Carrier Air India – Photo via Financial Express

Hardeep Singh Puri, India’s Minister for Civil Aviation, recently announced that the government had raised the cap on domestic flights from 60% to 70% of the pre-COVID.

The Minister tweeted –

Domestic operations recommenced with 30K passengers on May 25 & have reached 206K on November 8, 2020. @MoCA_GoI is now allowing domestic carriers to increase their operations from the existing 60% to 70% of the pre-COVID approved capacity.”

One may recall that the Ministry had allowed services to resume on May 25 this year after a gap of two months. The cap on domestic services gradually increased in phases starting from 33% in May. Additionally, in June, the cap rose to 45% and then to 60% in September. The present increase in the cap due to the significant increase in passenger traffic in October.

DGCA passenger data

For October, passenger traffic data from the Director-General of Civil Aviation (DGCA) shows the increasing trends.

India Air Passenger Traffic 2020 – Source DGCA

The passenger traffic remained in the range of two to three million per month in June, July, and August. The passenger traffic jumped in September, and the trend continued in October, crossing the five (5) million passenger mark. It is this increase that prompted the government to increase the cap on the capacity.

Year-on-Year growth to remain negative

However, Year-on-Year growth remains negative. Even with an optimistic outlook of crossing six (6) million passenger traffic in the remaining two months of the current year, the growth outlook is negative (-50%). Airlines stand to lose a similar ratio of revenue in the domestic sectors.

2019 Vs 2020 Passenger Traffic – Source DGCA

The DGCA has not been regularly reporting the daily flights being operated at present. However, we know that the Indian aviation operators had crossed the one thousand (1000) flights per day at the end of August. The pre-COVID flights operated on the domestic sectors were around two thousand five hundred (2500) per day. A seventy per cent cap (70%) would imply that we should be seeing around 1750 flights being operated every day in the coming months.

In our article in September, Indian Aviation – Recovery Is Still A Long Way Off, we had provided a detailed analysis of the monthly passenger traffic data. The actual recovery has exceeded the mathematical model predictions for September and October. As a result, this is really good news for airlines and travellers. For example, with COVID infections also showing a downward trend in the country, the air traffic should further improve. The industry is now hopeful that it would reach pre-COVID levels by March – April next year.

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