India’s air passenger numbers have dropped in June, reversing a brief recovery period. Data from the Ministry of Civil Aviation reveals a decline in air travel following the tragic Air India incident. Prior to this event, domestic air travel had shown signs of returning to normal. Daily passenger numbers, which averaged 490,000 in April, decreased in May due to the India-Pakistan conflict. They briefly recovered to 490,000 before the June 12 accident, subsequently dropping to 460,000.
International travel has also been affected, declining since May. Air India responded by cutting its international wide-body aircraft flights by 15% following the Ahmedabad crash of Air India-171, which claimed 241 lives. Between June 12 and June 17, 83 wide-body operations were canceled. International passenger figures fell from 118,000 daily in April to 113,000 in May and 102,000 in June.
Despite the potential for lower Aviation Turbine Fuel (ATF) prices to mitigate some of the demand drop, the geopolitical situation presents challenges. Crude oil prices have surged, increasing by approximately 20% since the start of June to $77/bbl by June 19. This surge could undermine earnings in the upcoming second quarter, which is typically a weaker season for the airline industry.