Domestic air cargo growth moderates in FY2019

The growth in both domestic passenger and air cargo traffic has declined in FY 2019. According to an analysis paper by leading credit rating agency, “the cargo traffic growth at Indian airports moderated to 6.0% in FY2019, as against double-digit growth witnessed over the last two years. The growth slowdown was primarily driven by international cargo segment, which accounts for 62% of the total cargo traffic, and reported Y-o-Y growth of 2.6% in FY2019 as against 15.6% in FY2018. On the other hand, domestic cargo traffic has witnessed robust Y-o-Y growth of 12.0% in FY2019, up from 8.1% in FY2018.”

The declining trend seems to be more serious on the passenger segment side which has registered a steep drop. Harsh Jagnani, Vice President and Sector Head for Corporate Ratings, ICRA, said“The slowdown has been witnessed primarily in Q4 FY2019, wherein the passenger traffic increased by only 3.9% Y-o-Y, as against growth of 14.5% 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. Thus, the robust growth trend of 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.”

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