December 2022 nearly makes it to pre-COVID numbers

I was surprised to see a couple of tweets claiming the industry had surpassed December 2019 figures. While December 2022 was a month like never before since May 2020, when civil aviation restarted, numbers released by the regulator show that the month missed crossing the December 2019 numbers by a whisker. The final numbers for December 2022 are yet to be released by the regulator and there will be another blog post, looking at the year in review when those are out.

The last month of 2022 saw 12,873,052 domestic passengers fly in India. The marvelous number is very close to December 2019, when COVID was yet to make an impact in India. The month of December 2019 had seen 12,980,408 domestic passengers in India, just 0.8% more than now. In fact the numbers could bridge further when DGCA declares the data after consolidation later this month. 

December was the first month since restart of civil aviation in India that the daily average passenger numbers crossed the four lakh mark. The industry recorded an average of 415,259 daily passengers, which was up by over 25,000 passengers per day as compared to the previous month. 

The numbers were significantly higher over October and November – which were filled with festivities. December has traditionally been a great month and the situation was no different in December 2021 until the news of another likely wave led by the Omicron variant started trickling in. 

This month saw a new high in daily passenger as well as flights deployed with the industry operating 2919 flights on Dec 29, 2022 while having highest passengers on Dec 24, 2022 when Indian skies saw 435,500 domestic passengers.

Read: November 2022 – IndiGo makes a comeback

Lower flights – Higher passengers

The industry operated 94,910 domestic flights in December 2019, while the numbers stood at just 87,984 in December 2022. Nearly the same number of passengers with 223 less flights a day is an achievement like no other and shows in the stronger load factor, which nearly all airlines have been reporting for the last couple of months. 

A strong load factor is on the back of a mix of multiple reasons starting with revenge tourism and shortage of planes. December saw both IndiGo and Go FIRST hit by engine issues leading to grounding of their aircraft. Coupled with lower aircraft deployment from SpiceJet and AirAsia India, the industry as a whole had lower operational aircraft than in 2019. While the aircraft issues continued, a new high in departure was possible due to SpiceJet operating wet leased aircraft, engine issue easing out marginally for Go FIRST and IndiGo, IndiGo’s reinduction of its A320neo and new deliveries along with slowing down or pausing redeliveries.

Airlines operated 87,984 departures in December 2022. Last year, the number was 87,258 while it was 64,002 in December 2020 and 94,910 in December 2019. Anecdotal evidence followed by last minute fares tied up with load factors indicate that most airlines have been able to push up fares owing to demand.

Challenges remain

A great month and a fantastic quarter for the industry but will that help generate profits? Back of the envelope calculations show that operationally airlines might just make it, especially IndiGo and SpiceJet, but a net profit will remain elusive – thanks to oil and exchange rates.

As IndiGo inches towards 300 planes and the engine issue eases out for IndiGo and Go FIRST, along with Air India, Vistara and Akasa Air inducting aircraft – it is going to come in a traditional lean season of January to March, a probable case of issues being resolved at the wrong time.

Network Thoughts 

The last few days of December have seen traffic moderate instead of climb and the same has continued thus far in January. I am not aware about how long the wet leases of SpiceJet are and when they leave, a significant capacity will be out for the airline. 

Sustaining that momentum is not difficult at current capacity, but will there be enough bums on seats at current fare levels in a lean season? The answer we will know in a few months from now. 

Traditionally, traffic has either plateaued in January over December or seen a small dip. Indications of lower oil would buffer some impact since there are no signs of the rupee strengthening against the dollar. 

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