The spate of intense fare discounts by private domestic airlines like SpiceJet, IndiGo and Jet Airways since January seems to have hit loss-making state-owned carrier Air India (AI) the most. Unable to match the aggressive marketing schemes, AI?s market share in August dipped to an over two-year low at 16.2%, a steep decline from 18% in the previous month of July.
Meanwhile, AI?s passenger load factors ? a measure of capacity utilisation ? fell to almost the bottom of the pile to 70.3% in August, just ahead of the much smaller Air Costa.
Air India last had a 16.2% market share in May 2012, around the time its turnaround plan was started and its fortunes have improved since then. This year (2014), it had a 19.8% market share in January, 19.5% in February, a peak of 20.4% in March, while in April, May, June and July AI?s market share has been between 18 and 18.6%.
Peeyush Naidu, senior director at Deloitte, said, ?Discounting offers by private carriers may have played a major role in them gaining passengers. These players have done better in terms of being flexible to market requirements. Aspects like channeling of capacity is also important.?
Interestingly, SpiceJet, which largely started the discount spree this year forcing all rivals to follow led in terms of load factors in August at 82.5%. GoAir came next at 81.3% while market leader IndiGo was at third at 74.8%.