December 11: Fitch Ratings is expecting that the average revenue passenger kilometres for Indian airlines to remain 40% below the 2019 levels in 2021. However, this will happen even when air travel has recovered from being 65% lower in 2020. The passenger traffic (domestic) was recorded to be weak with September data showing a 66% year-on-year drop.
This happened given the 2-months closure of Indian airlines activities which later resumed late May. Earlier on Wednesday, Fitch quoted in its latest outlook for the sector, “We expected market leader IndiGo to further consolidate its position from a 60 per cent share of domestic passengers in July due to liquidity pressure at rival airlines. However, its share declined to 57 per cent in September, which indicates smaller players are intensifying competition to regain share. This could limit gains for the industry from better traffic in 2021.”
About the global airline sector, Fitch expects that the flying conditions may improve in the coming year but the only relative to the unexpected downturn happened in 2020. Amid the crisis, nearly all airline ratings have remained upset. On this, Fitch Ratings also expects that in coming time more airline bankruptcies would be taking place. Especially, among the smaller airlines and the ones which are less capitalised.
Also read: Indians keen to travel to the UK to get covid vaccine, says India travel agents
Few countries have been able to introduce the vaccine against Covid, with this, Fitch expects a reduced risk towards the downside scenario where the traffic will see development at low levels through 2021.