New Delhi, March 14 : Domestic passenger traffic is estimated to rise by 54 per cent year-on-year (YoY) in February but decline by 5 per cent sequentially, according to rating agency ICRA. Daily departures averaged 2,967, up from 2,044 in February 2022 and 2,900 in January 2023, but down from 3,137 in February 2020. The average number of passengers per flight was 143, higher than the 139 passengers per flight in February 2022. "The domestic aviation industry continues to witness recovery, with domestic passenger traffic for February 2023 estimated at 119 lakh, 54 per cent higher than the domestic passenger traffic of 77 lakh in February 2022 and lower by only 4 per cent, compared to pre-Covid levels, i.e. 123 lakh in February 2020," said Suprio Banerjee, Vice President & Sector Head -- Corporate Ratings, ICRA Limited He added that on a sequential basis, it was lower by 5 per cent compared to 125 lakh in January 2023. For 11M FY2023 (April-February 2023), domestic passenger traffic is estimated at 1,229 lakh, a YoY growth of 65 per cent compared to 745 lakh in 11M FY2022 (April-February 2022), and lower by only 8 per cent compared to 1,338 lakh in April-February 2020. "The airlines' capacity deployment in February 2023 was higher by 45 per cent than February 2022. However, it was lower by 9 per cent than the pre-Covid levels. It is estimated that the domestic aviation industry operated at a passenger load factor (PLF) of 90 per cent in February 2023, compared with 85 per cent in February 2022 and 88 per cent in February 2020," he further added. In light of the above facts, due to the fast-paced recovery in domestic passenger traffic and improved pricing power, ICRA had recently revised its outlook on the Indian aviation industry to stable from negative. The industry is estimated to report a net loss of Rs 110-130 billion in FY2023, but this is much lower than ICRA's earlier estimated net loss of Rs 235 billion. The pace of recovery in earnings will be gradual due to the high fixed cost nature of the business. Capacity addition is expected to improve the RASK-CASK spread through better pricing discipline. The industry is expected to report a lower net loss of Rs 50-70 billion in FY2024. However, despite a healthy recovery in passenger traffic, the domestic aviation industry continues to face challenges on account of elevated ATF prices and the depreciation of the INR vis-a-vis the US dollar, both of which have a major bearing on the airlines' cost structure. "The airlines' efforts to ensure fare hikes proportionate to their input cost increases will be key to expanding their profitability margins," Banerjee commented. /IANS