Domestic air traffic growth lowest in 14 months on high fares, late festivalshttps://indianexpress.com/article/business/aviation/domestic-air-traffic-growth-lowest-high-fares-late-festivals-5460351/

Domestic air traffic growth lowest in 14 months on high fares, late festivals

Low-cost carriers SpiceJet and GoAir also witnessed a fall in PLF to 90.8 per cent and 84.1 per cent, respectively, during October. In September, their load factors were 93.2 per cent and 90.6 per cent respectively.

IGI Airport in Delhi (Representational Image)

A delayed festivals season and an uptick in flight fares has resulted in stunting of India’s domestic air traffic growth to 13.34 per cent on year in October – the lowest in the last 14 months, according to data published by the Directorate General of Civil Aviation. During the month, 1.18 crore passengers flew on domestic flights.

Furthermore, the slowdown in growth was also reflective in passenger load factor (PLF) – a measure of an airline’s occupancy – for most carriers. Barring market leader IndiGo, low-cost carrier AirAsia India and regional airline TruJet, all airlines witnessed a month-on-month fall in load factors. While Air India saw its domestic load factor fall to 78.8 per cent, compared with 81.1 per cent in September, Jet Airways’ PLF fell to 81.6 per cent from 84.9 per cent. Another full-service carrier Vistara also saw its load factor fall to 79.7 per cent from 84.9 per cent last month. A reduction in load factors indicate airlines flying with more empty seats.

Low-cost carriers SpiceJet and GoAir also witnessed a fall in PLF to 90.8 per cent and 84.1 per cent, respectively, during October. In September, their load factors were 93.2 per cent and 90.6 per cent respectively.

“While October recorded a 13.34 per cent growth as compared to the same month last year and the market continues to remain buoyant with over 1.18 crore passengers flying during the month, the monthly growth was tempered due to factors such as the delayed festival season this year and an increase in fares of over 15 per cent compared to September. However, with oil cooling off, prices are likely to be stable ensuring that the growth momentum is maintained. Overall, the growth to date since January 2018 continues at a robust 20.11 per cent with Christmas and New Year around the corner, we expect an increase in passenger traffic through to the end of the year,” said Sharat Dhall, COO(B2C), Yatra.com

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A rise in crude oil prices and a depreciating rupee over the last quarter has hit the airlines’ books with all the three listed airlines in India – Jet Airways, IndiGo and SpiceJet reporting losses for the quarter-ended September. The continuous addition of capacity in the market has restricted the airlines from passing on the cost increases to their customers.

Last month, SpiceJet CMD Ajay Singh had told The Indian Express that fares that were offered over the previous three months were “certainly not sustainable”. “Fares need to go up and airlines need to be more responsible. By inducting aircraft we are actually bringing down costs, which is the other objective. At this time we need to bring down costs and raise revenue. Right now, airlines really need to pass on the additional costs they have incurred, which has been around 20 per cent in the last year or so in terms of rupee depreciation and rising oil prices,” he had said.

In terms of market share, four carriers – Air India, AirAsia India, GoAir and TruJet – saw a rise in market share for October, compared with September. This has come at the expense of airlines Jet Airways, SpiceJet, IndiGo and Vistara conceding their share of the market.