Why domestic tailed international in 2023 air traffic growth | BetaVersa - BetaVersa
March 25, 2024

Why domestic tailed international in 2023 air traffic growth | BetaVersa

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As per data from the Airports Authority of India, international passenger traffic handled at Indian airports this fiscal year (April to November) jumped 25.3% year-on-year (y-o-y). Comparatively, domestic air passenger traffic witnessed a 17.9% increase in the same period.

However, domestic passengers outnumber international passengers by a wide margin. The number of domestic air passengers at Indian airports was 100.4 million in April-November, compared to 44.5 million recorded for international passengers.

Industry experts said the higher growth rate is a result of two factors. One, a low base effect, as international scheduled commercial flights resumed operations to and from India with effect from March 2022 after a two-year hiatus induced by covid-19. Two, higher interest among international and domestic airlines to operate more flights to and from India.

Among Indian carriers, market leader IndiGo and airlines from the Air India Group, including Vistara and Air India Express, are expanding in international skies. These airlines carried more passengers as they added flights during the year.

Data from the Directorate General of Civil Aviation (DGCA) shows that IndiGo registered a 37% jump in international air passenger traffic (including both to and from India) to 2.9 million passengers in July-September 2023, from 2.1 million in the same period a year ago.

Similarly, Air India’s international air passenger traffic rose 26% to 2 million passengers from 1.6 million passengers a year ago for the July-September period.

According to ratings firm Icra Ltd, the growth in international traffic has improved after curbs on international travel were lifted. Last fiscal, domestic traffic recovered to 98% of pre-covid levels, while the recovery for international traffic was lower at 86%.

“Given the base effect because of lower recovery levels along with healthy international traffic growth, the growth rate in the international traffic looks strong on a y-o-y basis,” said Vinay Kumar G., vice-president and sector head for corporate ratings, Icra.

Kumar said that in 2023-24, Icra expects international traffic to improve by 19-23% and domestic traffic by 13-15%.

According to omnichannel travel platform Thomas Cook, easier access to nearby countries without visa-related hassles is one of the drivers behind the sustained growth in international air traffic.

“The recent announcements of visa-free travel to countries like Thailand, Vietnam, Malaysia and Kenya are expected to spark increased interest among Indian travellers,” said Rajeev Kale, president and country head, holidays, mice (meetings, incentives, conferences and exhibitions tourism), visa, Thomas Cook (India) Ltd.

He added that the accessibility of easy-visa and visa-on-arrival options in these destinations further contributes to the growing appeal for hassle-free international travel.

“Increased preference for foreign vacations, travel for study and increase in business travel to India as a major investment destination are expected to support the growth in international traffic to and from India in the medium term,” Kumar of Icra added.

Thomas Cook sees Australia, New Zealand, France, Switzerland, Spain, Portugal, Hungary and Finland as popular choices for long-haul journeys, while there is strong travel sentiment for medium-haul destinations such as South Korea, Japan and Turkey as well.

For short-haul vacations, the top choices that are emerging among travellers include Singapore, Malaysia, Maldives, Dubai, Abu Dhabi, Thailand, Indonesia, Saudi Arabia, Ras Al Khaimah in the UAE, Oman, Hong Kong, Vietnam and Bhutan.

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