Second half of FY18 may see better air passenger growth

The air passengers traffic is likely to post better growth in H2FY18 on the back of an expected increase in the spare engines supply for A320 Neo operators coupled with likely addition of eight leased aircraft in the Jet Airways fleet by March next year, a report has said.

Besides, the trend of lower passenger growth and higher fares is likely to reverse in the second half of the fiscal year, offset by higher crude prices, said the ICICI Securities’ report.

Domestic air traffic grew by 16.5 per cent in September with an average passenger load factor (PLF) of 84.5 per cent. PLF is a measure of how much of an airline’s passenger carrying capacity is used or the average percentage of seats filled in an aircraft.

“The traffic growth is set to improve in H2FY18 on the back of better spare engine availability for Neo ( new engine option) operators. Additionally, Jet Airways is also set to add total eight aircraft by March end. This essentially implies that airlines remain on track to meet our FY18 passenger estimates,” it said.

The two domestic airlines — GoAir and IndiGo — have been forced to ground their Neo engine-fitted A320 planes due to the frequent glitches in the engines.

However, Pratt & Whitney (P&W), the US-based maker of these engines, had last week said it has provided more than 20 spare engines to the two carriers and that none of their aircraft are on ground now.

The Neo operators will benefit from the revised strategy of the engine supplies, it said.

“In their recent call, United Technology, the parent company of P&W, said they have made a change of plans in their engine delivery order, by which more spare engines will now be redirected to existing lanes instead of newly built airframes waiting for engines,” according to the report.