India Aviation Sector Sees Recovery gathered pace in May as international passenger traffic improved following easing geopolitical tensions in West Asia, while domestic air travel continued to witness strong demand. The latest industry data indicates a gradual normalisation of international flight operations and sustained momentum in India’s fast-growing aviation market.
India Aviation Sector Sees Recovery Boosted by Rise in International Passenger Traffic
Easing geopolitical tensions facilitated the gradual normalisation of international flight operations, while lower aviation fuel costs supported airlines despite continued pressure from a weak rupee on aircraft leases, maintenance and other dollar-denominated operating expenses, according to a report by Equirus Securities.
International passenger traffic carried by Indian airlines recovered sequentially to around 2.3 million passengers, increasing 24 per cent month-on-month, while revenue passenger kilometres (RPKs) rose to around 8 billion, up 12 per cent sequentially.
Flight departures improved to about 14,200, up 22 per cent month-on-month, while available seat kilometres (ASKs) increased 10 per cent to around 10.5 billion. The rise in international travel reflects improving airline operations following disruptions linked to geopolitical developments in West Asia.
Passenger demand outpaced capacity recovery, resulting in the passenger load factor improving to 76.6 per cent, indicating a gradual return to normal international operations.
Lower Fuel Costs Offset Pressure from Weak Rupee
The report said global aviation fuel prices corrected significantly on a sequential basis, providing relief on airline operating costs. Brent crude averaged around $72.9 per barrel, rising 8 per cent year-on-year but declining 21 per cent month-on-month.
However, the Indian rupee remained weak at around 94.7 against the US dollar, about 10 per cent weaker year-on-year, continuing to increase the cost of dollar-denominated expenses such as aircraft leasing, maintenance and spare parts. Currency fluctuations remain one of the key challenges facing Indian airlines despite easing fuel costs.
Strong Domestic Air Travel Continues to Support Growth
On the domestic front, passenger traffic increased to around 15.4 million, registering growth of 10 per cent year-on-year and 11 per cent month-on-month, while revenue passenger kilometres (RPKs) rose to around 15.3 billion, also increasing 11 per cent annually and sequentially.
Capacity additions remained healthy, with Available Seat Kilometres (ASKs) increasing to around 17.8 billion, up 8 per cent year-on-year and 6 per cent month-on-month, while flight departures also recorded steady growth. Strong domestic demand continues to be a major growth driver for India’s aviation sector as airlines expand connectivity and capacity.
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