Air cargo volumes are expected to decline by 17-20 per cent in FY21 with meaningful recovery in cargo volumes expected only in FY22, ICRA Ratings said on Friday.
Anupama Arora, Vice President and Sector Head, ICRA Ratings, said: "Despite faster ramp-up, the total cargo volumes declined by 45 per cent YoY in H1 FY2021, with slow recovery in passenger aircraft traffic leading to loss of the earlier available cargo belly space constraining cargo growth."
"In October 2020, the cargo volumes are likely to show significant improvement sequentially owing to the expected higher domestic air traffic movement due to the festival season."
As per the report, the cargo volumes in September 2020 reached to 89 per cent of pre-Covid levels when compared to passenger traffic at 29 per cent.
Besides, the ratings agency cited that on the supply side, airlines adopted cargo on seats and dedicated freighters to meet demand while there was inherent fear to travel during Covid-19 pandemic amongst business and leisure travellers - the major contributors to passenger traffic historically, which kept travel demand subdued.
"The domestic cargo volumes witnessed significant improvement to 94,598 tonnes in September 2020 from 7,280 tonnes in April 2020. The ramp up in domestic cargo transportation in aircraft bellies of commercial passenger flights aided volume growth. With the restrictions on the passenger capacity, domestic airlines followed 'cargo-on-seats' model thereby utilising some aircrafts of their grounded fleet for cargo operations."
Besides, the report pointed out that airports in metro cities have contributed to around 90 per cent of the overall cargo traffic over the last few years.
"While the recovery has been faster in metros with Delhi, Bengaluru, Chennai and Hyderabad reaching closer to pre-Covid levels in September 2020, that of Mumbai and Kolkata remain constrained at 73 per cent and 52 per cent of September 2019 levels," Arora said.
"We note that the recovery in the non-metros in September 2020 has reached to around 73 per cent of September 2019 cargo volumes."