<p>After years of strong growth, the traffic growth at Indian airports has hit an air pocket with passenger traffic declining by 1.1% (Y-o-Y) in March 2019.</p>.<p>This has dragged down the FY2019 passenger traffic growth to 11.6%, making it the lowest over the last five fiscals. During the same period, the aircraft traffic grew by 12.1%, while the cargo traffic increased by 6.0%, according to a press statement.</p>.<p>Throwing more light on the development, Harsh Jagnani, Vice President and Sector Head for Corporate Ratings, ICRA, said: “The slowdown has been witnessed primarily in Q4 FY2019, wherein the passenger traffic increased by only 3.9% Y-o-Y, as against a growth of 14.5% in the first nine months. Further, the decline in March 2019 is the first instance of Y-o-Y traffic de-growth in a month since February 2013. Thus, the robust growth trend of the last few years, wherein the CAGR had been 17.5% (FY2015-FY2018) has been arrested. This can impact revenues and margins for the airports' sector, at a time when many of them are undertaking sizeable capex.”</p>.<p>The decline in passenger traffic follows the increase in airfares due to the lower number of flights owing to multiple issues. The overall aircraft traffic also witnessed marginal de-growth of 0.1% in March 2019, led by a decline of 1.0% in international aircrafts, while domestic aircraft movement remained stagnant, the press statement states.</p>.<p>As for airport-wise passenger traffic movement, the same has shown mixed trends, but the major airports of Delhi (-9.4%), Mumbai (-16.2%), Chennai (-7.4%), and Cochin (-11.3%) have reported sharp Y-o-Y decline in March 2019. On the other hand, Bengaluru, Hyderabad, Ahmedabad, Guwahati, and Goa have maintained growth momentum. Overall, metro and non-metro airports reported contrasting performance with former de-growing while the latter reported growth. This affirms diversification of traffic across multiple cities of the country.</p>.<p>In another development, the cargo traffic growth at Indian airports moderated to 6.0% in FY2019, as against double-digit growth witnessed over the last two years. The growth slowdown was primarily driven by international cargo segment, which accounts for 62% of the total cargo traffic, and reported Y-o-Y growth of 2.6% in FY2019 as against 15.6% in FY2018. On the other hand, domestic cargo traffic has witnessed robust Y-o-Y growth of 12.0% in FY2019, up from 8.1% in FY2018.</p>
<p>After years of strong growth, the traffic growth at Indian airports has hit an air pocket with passenger traffic declining by 1.1% (Y-o-Y) in March 2019.</p>.<p>This has dragged down the FY2019 passenger traffic growth to 11.6%, making it the lowest over the last five fiscals. During the same period, the aircraft traffic grew by 12.1%, while the cargo traffic increased by 6.0%, according to a press statement.</p>.<p>Throwing more light on the development, Harsh Jagnani, Vice President and Sector Head for Corporate Ratings, ICRA, said: “The slowdown has been witnessed primarily in Q4 FY2019, wherein the passenger traffic increased by only 3.9% Y-o-Y, as against a growth of 14.5% in the first nine months. Further, the decline in March 2019 is the first instance of Y-o-Y traffic de-growth in a month since February 2013. Thus, the robust growth trend of the last few years, wherein the CAGR had been 17.5% (FY2015-FY2018) has been arrested. This can impact revenues and margins for the airports' sector, at a time when many of them are undertaking sizeable capex.”</p>.<p>The decline in passenger traffic follows the increase in airfares due to the lower number of flights owing to multiple issues. The overall aircraft traffic also witnessed marginal de-growth of 0.1% in March 2019, led by a decline of 1.0% in international aircrafts, while domestic aircraft movement remained stagnant, the press statement states.</p>.<p>As for airport-wise passenger traffic movement, the same has shown mixed trends, but the major airports of Delhi (-9.4%), Mumbai (-16.2%), Chennai (-7.4%), and Cochin (-11.3%) have reported sharp Y-o-Y decline in March 2019. On the other hand, Bengaluru, Hyderabad, Ahmedabad, Guwahati, and Goa have maintained growth momentum. Overall, metro and non-metro airports reported contrasting performance with former de-growing while the latter reported growth. This affirms diversification of traffic across multiple cities of the country.</p>.<p>In another development, the cargo traffic growth at Indian airports moderated to 6.0% in FY2019, as against double-digit growth witnessed over the last two years. The growth slowdown was primarily driven by international cargo segment, which accounts for 62% of the total cargo traffic, and reported Y-o-Y growth of 2.6% in FY2019 as against 15.6% in FY2018. On the other hand, domestic cargo traffic has witnessed robust Y-o-Y growth of 12.0% in FY2019, up from 8.1% in FY2018.</p>
