New Delhi, March 28 After a gap of two years, India's airport sector is expected to become profitable in FY23.
As per ICRA, the trend will be supported by the resumption of international commercial operations and increase in tariffs.
"Resumption of international commercial operations would accelerate the traffic recovery. Southeast Asia, Middle East and Europe are expected to be the major destinations driving the demand. The yield per passenger is much higher for the international sector both from aero and non-aero revenues perspective which is a positive for airport operators," said Rajeshwar Burla, Group Head, Corporate Ratings, ICRA.
"This along with the increase in tariffs at some of the major airports will result in operating income (OI) growth of 49-51 per cent Y-o-Y in FY2023. While operating profitability is expected to improve sequentially in FY2023 to 29-30 per cent from 18-19 per cent in FY2022, it is still likely to remain lower than pre-Covid level of 40 per cent with full recovery likely in FY2024 only."
According to ICRA estimates, all India passenger traffic is likely to increase by 68-70 per cent YoY to 317-320 million in FY2023.
Besides, domestic passenger traffic is expected to witness 64-66 per cent YoY growth in FY2023 and reach pre-Covid levels.
On Sunday, the Centre allowed for resumption of international commercial operations after a gap of two years due to pandemic, international traffic is expected to see healthy growth of 100-105 per cent YoY in FY2023 and recover to pre-Covid levels in FY2024.
"This is factoring in the assumption that the impact of future Covid waves (if any) to be low."
In FY2022, the passenger traffic is estimated to increase by 62-64 per cent YoY (on a lower base) to 187-189 million despite the temporary disruption in the form of Omicron, but supported by healthy pace of vaccination.
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