FY19 air passenger growth slowest in 5 years: ICRA

New Delhi  :  High airfares and capacity constraints decelerated the passenger traffic growth at Indian airports in 2018-19 to its lowest rate in the last five years, ratings agency ICRA said on Thursday.

According to the ICRA, the decline in passenger traffic follows the increase in airfares due to lower number of flights owing to multiple issues.

The rating agency said that after years of strong growth, the passenger traffic growth at Indian airports declined by 1.1 per cent on a year-on-year basis in March 2019.

The slowdown dragged the FY19 passenger traffic growth down to 11.6 per cent, making it the lowest over last five fiscals. During the same period, the aircraft traffic grew by 12.1 per cent, while the cargo traffic increased by 6 per cent.

"The slowdown has been witnessed primarily in Q4 FY2019, wherein the passenger traffic increased by only 3.9 per cent Y-o-Y, as against growth of 14.5 per cent 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," said Harsh Jagnani, Vice President and Sector Head for Corporate Ratings, ICRA.

"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."