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Air cargo traffic impacted by demonetisation

During November 2016, air cargo traffic registered a y-o-y growth of 7 per cent (from 14 per cent the previous month). On m-o-m basis, cargo traffic witnessed a decline of 12 per cent in November 2016, as against 9 per cent m-o-m growth in October 2016, owing to the slowdown in economic activity because of demonetisation, ICRA said in an analysis.

Says Mr Harsh Jagnani, Vice-President and Sector Head for corporate ratings, ICRA: "The slowdown is primarily on account of decline in domestic cargo traffic, which reported a y-o-y de-growth of 4 per cent in November 2016 as against 12 per cent growth in October 2016. The decline in domestic cargo traffic can be attributed to the slowdown in economic activities in the country following demonetisation in November 2016. However, the international cargo traffic, which constitutes around 63 per cent of the overall cargo traffic in the country, reported a relatively stable growth of 15 per cent in November 2016 as compared to 16 per cent in October 2016, thereby supporting the overall cargo traffic growth". Both domestic and international cargo traffic reported a decline on m-o-m basis in November 2016, falling by 20 per cent and 6 per cent, respectively. Moreover, 18 out of the top 20 airports reported m-o-m decline in cargo traffic in November 2016, as per the analysis.

Source: Exim News Service - MUMBAI, Jan. 8

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