The domestic aviation sector is likely to end 2017-18 on a positive note because of buoyant passenger traffic, which is estimated to rise around 18 per cent, rating agency Icra said on Saturday.
The credit rating agency said the domestic passenger traffic growth remained healthy because of an improvement in core growth drivers such as economic environment and increasing tourism demand.
Headwinds in the form of firm crude oil prices and delays in delivery of aircraft did not impact the sector’s fortunes much.
“The passenger traffic on routes under the regional connectivity scheme (RCS) has remained marginal in the current fiscal in line with Icra expectations. There have been delays in commencement of operations on many of the routes because of inadequate readiness of the airports or slot constraints at the key airports,” Icra added.
However, considering wider participation by airlines in the second phase of RCS, the scheme is likely to generate material passenger traffic over the next two to three years,” Icra added.