Vaccine Rollout to Support Recovery of Air Transport Sector in Coming Months: Ind-Ra

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The start of vaccination drives in several countries globally along with higher fleet deployment levels will support the recovery of the air transport sector in the coming months, India Ratings and Research (Ind-Ra) said.

Accordingly, the agency's India logistics sector report said: "While passenger numbers for airlines are still down on a YoY basis, the start of vaccination drives in several countries globally and the Indian government allowing 80 per cent of fleet to be deployed are key positives recently."

"While both these developments should be supportive of a recovery in operating cash flow and liquidity in coming months, this will likely be offset at least partly by ongoing higher fuel prices."

According to the report, since resumption of operations on May 25th, domestic air traffic continued to sequentially improve in December 2020.

The domestic passenger traffic rose 15 per cent MoM in December 2020, although was down 43 per cent YoY. "In the domestic operations, passenger load factor stood at 65-78 per cent during December 2020."

"However, approval for vaccines and governments undertaking vaccination drives in major countries will likely raise consumer confidence in air travel and be supportive of a recovery over the medium term."

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On an overall basis, in December 2020, key metrics for the wider logistics sector continued to report a sequential recovery.

"India's port volumes grew 4 percent YoY, while E-way bill generation increased 16 per cent YoY during the month."

"Railway volumes also rose 9 per cent YoY in December 2020, though they remained down 2 per cent YoY in April-December 2020."