Indian feels the pinch as its market share takes a nosedive

With its market share declining sharply, national domestic carrier, Indian, has finished fourth behind Jet Airways, Kingfisher and Deccan Aviation, according to January 2008 market share data released by the directorate general of civil aviation.

The public carrier has witnessed a consistent fall in market share since January 2006, which industry watchers attribute to the airline?s merger woes with Air India and the consequent fleet rationalisation.

Interestingly, the domestic airline market appears to be slowing down with the month of January 2008 witnessing a drop in the number of passengers.

After more than two years of growing at around 30% per year, the number of domestic air travellers in India has fallen marginally in January.

Domestic airliners peaked in December 2007, carrying 40.12-lakh passengers, but in January the number of passengers carried by domestic carriers fell marginally to 38.97-lakh.

?The fall is a consequence of higher fare being charged by the carriers as well as rising saturation in existing capacity at both the airport and airline levels,? a ministry of civil aviation official said.

?But the ministry has been expecting a stabilisation as the recorded 30% was too high,? he added. ?A growth rate of between 22-25% is ideal and what we expect the industry will settle at,? the official said.

Analysts believe the fall may lead to fares coming down but expects no major change. The Delhi airport opening its modernised terminal later this year will probably lead to a jump in the numbers, the ministry official said.

Added to the fall in passengers, the trend of established carriers losing market share to newer ones that developed last year seems to have continued this year.

Edging out other carriers, Jet Airways? market share increased to 22.7% in January from 22.3% last year. Vijay Mallya-promoted Kingfisher has jumped to second place with 15.2% market share after posting 14.4% market share in December last year. Low cost carrier Deccan Aviation continues to retain its third position posting a market share of 14.4% in January after posting 15.4% in December 2007.

Indigo has seen the biggest gain in market share since starting operations in the third quarter of 2006 posting 10.9% in January. The carrier?s market share in January 2007 was 4.3%. Spicejet, Jetlite, GoAir and Paramount bring up the rear with Spicejet and GoAir posting a gain of 0.2% over their December figures.