Global airlines’ body IATA has warned that India’s over two-year-long uninterrupted double digit growth in the domestic aviation market is set to end this month, saying the domestic traffic has been witnessing a slow-down since demonetisation. “The very strong upward SA (seasonally-adjusted) traffic trend has slowed since the unexpected ‘demonetisation’ in November 2016, in line with the wider impact that this looks to have had on economic activity…
“At the current trend, India’s impressive run of double- digit year-on-year growth rates looks set to end in July,” said International Air Transport Association (IATA) in its monthly report . The domestic air traffic in the country has seen an impressive double-digit growth since January 2015, which petered out early this year.
From January 2016 until February 2017, India saw over 20 per cent growth for 14 consecutive months, as per government data. In March, however, the growth dropped to 18.59 per cent. It slowed down further in April (17.71 per cent) and May (17.63 per cent).
At the same time India also lost its fastest growing domestic aviation market tag after a gap of 23 months. In March, domestic growth in China (15.1 per cent) outpaced India’s (14.6 per cent), as per IATA. In April, as per the global body, it was Russia (16.7 per cent) that toppled India (15.3). About the slow down in March IATA had said that it was “the first possible sign of reduced cash supply and wider economic uncertainty weighing on demand.”However, India is back at the top among domestic aviation markets, according to IATA’s passenger traffic data for May.
India recorded 17.7 per cent year-on-year increase, ahead of China (16.8 per cent) and Russia (12.8 per cent), said IATA. On international traffic, IATA said that the ban on carriage of electronic devices on flights to the US from ten airports led to middle-east carriers witnessing an 8-year low in growth in passenger demand.
About the isolation of Qatar from its neighbours, IATA added, “rising trade protectionism and barriers to travel are worrying trends that, if unchecked, could impact demand. As a business airlines depend on borders that are open to trade and people.”