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Domestic air traffic sees sharp fall in October

Source : BUSINESS_STANDARD
Last Updated: Tue, Nov 20, 2012 20:10 hrs
Govt allows 49 % FDI in aviation

Domestic passenger traffic fell 15.7 per cent in October, while government-owned Air India (AI) strengthened its market share to 20.8 per cent.

Kingfisher Airlines exited the market in October and domestic airlines gained market share at its expense. The traffic fell from 5.4 million in October last year to 4.55 mn in 2012. This was despite October being a festive season and the start of a strong quarter; the fall was the sharpest this year. Aviation experts blame the fall on an increase in fares by 20-30 per cent as compared to last year. Over January-October, passenger traffic fell 2.5 per cent.

"Ever since the 30 per cent rise in fares, domestic air traffic has shrunk. It fell 10 per cent in September. A double-digit decline with each passing month does not bode well for the economy. One reason why the fall is higher in October is because last year, Diwali was in that month. While capacity and demand have reduced, airlines have benefited as yields have improved.,'' said Sharat Dhall, president, online, of portal Yatra.com.

Adding: "I do not see fares drop till December-end or early January. You could see some change in fares in January-March, a low season. The airlines could drop capacity further, if fuel prices continue to stay high.'' At present, many airlines -- including AI, GoAir and IndiGo -- are selling tickets at discounted rates for travel in January-March, through special sales.

In October, IndiGo led with 27.8 per cent share. The Jet Airways-Jet Konnect share rose to 24.7 per cent (from 23.8 per cent in September). SpiceJet also notched up to 19.1 per cent, up from 18.5 per cent in September. GoAir reported a share of 7.6 per cent.

Last October, Kingfisher flew 900,000 passengers and accounted for 16.5 per cent of the market.

By September, its share fell to 3.5 per cent and its operations were shut in October, due to a strike and suspension of its permit.

That load has now been distributed among the other airlines.

AI was the biggest beneficiary of Kingfisher's fall. Its share has risen from 16.2 per cent in May to the 20.8 per cent in October. In September, it was 19.3 per cent. The rise can be attributed to the airline's efforts to attract business traffic and better on-time performance, apart from selling low-cost promotional fares.

Civil Aviation minister Ajit Singh has asked AI to further improve its load factor and on-time performance, while aggressively implementing customer-friendly initiatives. AI had recently taken several such measures, on fares and on ensuring maintenance of schedules, coupled with improved utilisation of its aircraft, the ministry said.


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