AI market share may have been nearly halved

Written by Shaheen Mansuri | Mumbai | Updated: May 9 2011, 08:39am hrs
The strike by a large section of national carrier Air Indias (AI) pilots finally ended on Friday, but only after impacting the carriers market share for April as well as May. AI had to cancel 1,470 flights from April 27 till May 6, when a large section of its pilots from the erstwhile Indian Airlines, struck work demanding salaries equal to their counterparts in AI.

AI, which operates 320 flights daily to domestic and international destinations, will also re-start fresh bookings, shut in the past few days, from Monday. In a statement on Saturday, the airline had said that it would restore over 50% of all flights in the domestic network on Sunday, and that it expects full normal operations by Monday.

Currently, AI has a 17% market share in the domestic skies compared to Jet Airways 26% (including subsidiary JetLite) and Kingfisher Airlines 18%.

An analyst tracking the aviation sector says, AI has lost almost three lakh passengers in the past ten days to its rivals Jet, Kingfisher and even low fare carriers like SpiceJet and Indigo. Due to flight disruption for ten days, which led to 90% flight cancellations, AIs market share will dip to around 10%. In March 2011, all domestic airlines carried 4.8 million passengers across various sectors within the country, up 23% from the same period, a year ago.

Every month, the Directorate General of Civil Aviation (DGCA) releases a data of various airlines on their load factors, market share and on-time performance. Market share is very crucial in determining an airlines operating performance.

Rajesh Rateria, chairman, Travel Agents Association of India (TAAI), western region says, There was a shift in bookings from AI to other carriers, including low cost carriers like GoAir, Indigo and SpiceJet. However, fares are bound to be high because the business model of airlines is such that last minute fares are always higher than the one booked one month in advance. However, AI will not take fresh bookings till May 10. But, once they open the ticket window, they will have to offer attractive fares to get back passenger loyalty.

Rateria further says that not only various airline websites had high traffic for bookings, but online travel agencies too, which had removed AI from the search engine pages, saw a sudden spurt in bookings on other carriers due to the holiday season. The fares shot up over 50% from R5,000 on the Mumbai-Delhi sector to R15,000 during the period when AI pilots had struck work.

AI, according to at the back of the envelope calculations has lost over R100 crore as revenues due to the strike.

An AI spokesperson said, Despite the strike, we carried 32,000 passengers on our flights to various domestic destinations and took all efforts to minimise inconveniences to our passengers. We also transferred about 18,000 domestic and 9,000 international passengers to other carriers.