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Friday, 10 February 2017

Air passenger traffic in India to grow 21-23% in 2016-17: CRISIL

Crisil Research estimates domestic passenger traffic in India to grow 21-23 percent on-year in 2016-17, primarily on account of lower air fares following decline in fuel prices and high competition. In 2017-18, growth in domestic passenger traffic is expected to moderate to 15-17 percent on-year, on account of relatively flat fares – projected to rise 0-2 percent. Economic growth, low fares and better connectivity to tier-II and -III cities would be the key growth drivers. During the year, domestic passenger load factor (PLF), though, is expected to decline 100–200 bps to 81-82 percent because of fleet expansion.

International passenger traffic is estimated to grow 9-10 percent on-year in 2016-17 due to increase in trade, tourism and the Indian expatriate population. During the year, fares, though, are estimated to decline 1-2 percent on account on high competition on short haul routes. In 2017-18, international passenger traffic is projected to rise a further 10-11 percent on-year as the government focusses on widening the air services agreement. Among international routes, UAE routes will dominate.
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