Indian aviation veers toward non-metros in December, 13 cities see traffic better than pre-COVID levels

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Indian aviation veers toward non-metros in December, 13 cities see traffic better than pre-COVID levels

December has seen air passenger traffic touch a new high in at least 13 cities, with numbers higher than pre-COVID-19 levels.

All the 13 are tier- 2 and 3 cities, underlining the recent trend in Indian aviation, where passenger traffic has picked up better in smaller destinations than in the metros. The list includes Gorakhpur, Prayagraj, Ludhiana, Belgaum and Srinagar.

This is an improvement from November when six cities saw a year-on-year improvement. This is based on data from the Airports Authority of India.

“Domestic airline operations in December 2020 continued the gradual streak of improvement and stood at 57 percent of pre-COVID levels (v/s ~49 percent in November 2020),” analysts Swarnendu Bhushan and Sarfraz Bhimani of Motilal Oswal had said in a recent report.

“We reaffirm that optimism over the vaccine could certainly result in increased flying confidence. Also, the reopening of physical offices would require migrant employees to fly back to their job cities,” they added.

Hindon and Pathankot airports witnessed among the highest growth rates, with passenger traffic increasing by 41.6 percent and 28 percent, respectively. Both the cities feature on regional routes. While Hindon is connected by Star Air and Air Heritage, Air India’s unit Alliance Air flies from Pathankot.

The reverse migration had helped the domestic aviation get back to its feet when flights resumed in May 2020. The busiest routes were those connecting metros to smaller cities such as Patna, Varanasi and Srinagar. Since then, the trend has sustained, even though the traditionally busy routes such as Delhi-Mumbai and Bengaluru-Mumbai have regained some of the lost ground.

The increasing traffic to smaller destinations has already seen airlines too shifting gears. IndiGo, the country’s largest airline, had recently announced seven new stations, all in smaller cities including Agra, Leh and Darbhanga. Peers, especially SpiceJet, have also expanded operations, despite the government cap of 80 percent on capacity utilisation, still in force.

Read more: IndiGo’s seven-city move, data from smaller airports show a shift in Indian aviation industry

“Tier 2 airports provided not only much-needed capacity but also provided a 2x yield during December 2020. The challenge that such Tier 2 routes, however, is the high seasonality effect. The uptick and downtick from tier 2 airports provide a challenge for the airline revenue management teams,” said Rohit Tomar, Managing Director, Caladrius Aero.

Caladrius Aero is an aviation Consulting company specialised in aircraft leasing, airlines and MROs, founded by Tomar and Ram Shankar, both industry veterans.

Aircraft movement

Data from the Airports Authority of India throws up a similar trend when one looks at aircraft movement.

While in November, 15 tier 2 and 3 cities had already surpassed their pre-COVID-19 levels, in December, the list has increased to 21 destinations. The additions to the list include Leh, Chandigarh, Patna, Mysore and Salem. Interestingly, Hindon and Pantnagar, which had recorded higher aircraft movement year-on-year in November, saw a drop in December.

Some destinations, including Hindon, feature on the passenger traffic list, but not when it comes to aircraft movement.

“The anomaly shows that even while airlines are deploying capacity in these routes, it doesn’t mean that passenger traffic has increased in the same manner. Passenger loads are still low,” said a senior executive working in a private airline.

Passenger loads, according to data released by aviation regulator DGCA, ranged from 65 to 78 percent in December, way below the over 90 percent occupancy seen a year earlier.