Domestic airlines led by low-cost IndiGo have posted a 16.6% rise in passenger traffic to 60 million in the calendar 2011 even as losses during the year piled up due to high operating cost and lower air ticket prices offered by carriers in their bid to enhance market share.
According to the latest data compiled by aviation industry regulator Directorate General of Civil Aviation (DGCA), almost all the carriers logged higher seat factor or revenue passenger per kilometre (RPK) during the month of December on the back of ongoing peak season. While the state-owned Air India maintained a seat factor of 77.3%, the country?s largest budget carrier IndiGo clocked over 90%.
?Like November the month of December also witnessed comparatively higher seat factor primarily due to peak season,? the DGCA said in its monthly traffic report.
The high traffic growth, however, has not yielded profits for the airlines. The industry is estimated to lose $2.5-3 billion in the current fiscal.
?While we celebrate the high traffic growth in India, one has to realise that this is coming at the cost of the profitability of the Indian carriers. The financial losses of the airlines quarter after quarter does not augur well for the country. Ticket prices have to be reflective of costs, for a healthy aviation sector,” KPMG director (aviation) Amber Dubey said.
At the end of the year, IndiGo maintained a market share of 19.5%, second highest following the combined pie of 25.9% of Jet Airways and its wholly-owned subsidiary JetLite. IndiGo is likely to further increase its market share as it plans to induct 12 more A320 aircraft in 2012 taking its fleet size to 60.