Economic slowdown and lean travel season clip wings of India's airlines

An executive of a private airline said even though volume picked up, it will be difficult for airlines to make money as fares have remained low even during festive season.

Illustration: Uttam Ghosh/Rediff.com

Domestic air passenger traffic declined for the fourth consecutive month in September, amid a slowing economy and lean travel season.

Scheduled carriers ferried 11.53 million passengers in September, compared to 11.79 million in August, showed data issued by the Directorate General of Civil Aviation (DGCA) on Thursday. They had carried 11.90 million passengers in July.

“The numbers are disappointing. They have pulled down our projection and now we peg (yearly growth for 2019 at 4-6 per cent).

"The good news is that we have managed to withstand the exit of Jet Airways and maintained positive growth despite three months of negative or flat growth,” said a DGCA official.

IndiGo continued its dominance in Indian skies, carrying nearly one in every two passengers. In doing so, it more than made up for lost ground in August.

Its market share rose to 48.2 per cent from 47 per cent in August. It was 47.8 per cent in July.

On the back of reasonable growth in the first five months of the calendar year, traffic for domestic airlines from January-September was still higher by 3 per cent, rising to 105.89 million, against 102.79 million in the same period last year, according to DGCA.

“The loss in fleet, on account of Jet Airways, has largely been recovered and we expect an all-time high fleet of above 616 aircraft in a month’s time.

"With more aircraft joining by December 31, we expect a return to double-digit growth early next year," the official added.

The Delhi-based airline carried 5.56 million passengers in September, while SpiceJet flew close to 1.7 million passengers, notching up 14.7 per cent market share.

The Ajay Singh-owned airline’s market share fell from 15.5 per cent last month.

Air India improved its share by 20 basis points to 13 per cent, flying nearly 1.5 million passengers during the period.

However, an executive of a private airline said even though volume picked up, it will be difficult for airlines to make money as fares have remained low even during festive season.

"Even during the peak Durga Puja period, fares have not gone higher than Rs 5,000. Therefore, it will be quite difficult time for airlines," he said.