The pace of growth in air traffic hit a five-year low at 11.6 percent in fiscal 2019, pulled down by low growth of 3.9 percent in the March quarter as against a healthy 14.9 percent in the first three quarters.
Cargo traffic growth also moderated in the year to 6 percent, as against double-digits growth witnessed over the past two years.
According to Icra, domestic passenger traffic declined by 1.1 percent in March, overall traffic saw a de-growth of 0.1 percent in the month as international aircraft movement dipped by 1 percent while domestic aircraft movement was flat.
The de-growth in March was the first since February 2013, the agency said on Thursday, 2 May.
The passenger traffic movement at the four key airports reported a sharp decline in March as travel demand in the Delhi and Mumbai airports de-grew 9.4 percent and 16.2 percent, respectively. Similarly, Chennai saw a 7.4 percent de-growth and Kochi degrew by 11.3 percent in March.
"After years of strong growth, air traffic growth has hit a low with passenger traffic declining by 1.1 percent in March. This has dragged down the full year passenger traffic growth to 11.6 percent, making it the lowest in the past five years," Icra said.
Overall aircraft movement grew by 12.1 percent, while cargo traffic increased by 6 percent in the year.
Between FY15 and FY18, the air traffic grew an annualized rate of 17.5 percent. But this has been arrested of FY19. "This can impact revenue and margin of airports at a time when many of them are undertaking large capex," said Harsh Jagnani of Icra said.
The decline in passenger traffic follows the increase in airfares due to lower number of flights owing to multiple issues, he aid.
Noting that Bengaluru, Hyderabad, Ahmedabad, Guwahati, and Goa have maintained growth momentum, Icra said overall, the metros airports de-growing.
According to the agency, cargo traffic growth also moderated to 6 percent in FY19, as against double-digits growth witnessed over the past two years.
The slowdown was primarily driven by the international cargo segment, which accounts for 62 percent of the total cargo traffic, and grew only 2.6 percent in FY19 as against 15.6 percent in FY18.
On the other hand, domestic cargo traffic had a robust growth of 12 percent in FY19 up from 8.1 percent in FY18.