Ratings agency Crisil has said that India's air traffic is expected to slump in FY22 and fully recover only by fourth quarter of the next fiscal, because of the debilitating consequences of the second COVID-19 wave. "But the credit quality of airport operators will continue to be supported by strong business models and healthy liquidity covers amid low debt servicing requirements this fiscal. This is based on an analysis of the top four private airports - Delhi, Mumbai, Bengaluru and Hyderabad - which accounted for 90 per cent of air passenger traffic handled by private airports in India and 50 per cent of all air traffic last fiscal,” the ratings agency noted. 

With a raging second wave resulting in localised lockdowns, night curfews and other restrictions on movement of people, passenger traffic at airports has nosedived, with average daily domestic passenger traffic halving in May 2021 from February 2021, or to a mere 10 per cent of pre-pandemic levels seen in May 2019. "Second wave will push back revival of business travel and pick-up of international traffic, which account for over half of overall traffic. Given this backdrop, we now expect traffic volumes this fiscal to be 60 per cent of fiscal 2020 levels and recovery to pre pandemic levels happening only by fourth quarter of fiscal 2023," Senior Director, Crisil Ratings, Manish Gupta, said.

Nevertheless, traffic volumes are expected to rebound once the present affliction curve starts to flatten. "Ramp up in domestic traffic was seen after the recommencement of airport operations in May 2020, with total passenger traffic reaching 60 per cent of fiscal 2020 levels by February 2021, i.e. within 9 months of the first domestic travel advisory,” Gupta said. "And a much faster recovery is expected this time based on the ongoing vaccination drive, push from government to limit the economic impact and recovery trajectory seen in countries that have emerged from a second wave,” he added. 

In fact, recovery indicators from US and Europe are positive and exhibit faster recovery post second wave. "Still the normalisation in India is expected only by fourth quarter of fiscal 2023. This will lead to loss of Rs 900 crore revenue from earlier pre-second wave expectation of Rs 7,500 crore of revenue in fiscal 2022,” he said.