Ferrying a million domestic passengers in July, Vistara crossed 10% of market share in a month for the first time, trailing only industry leader IndiGo.

Domestic air passenger traffic, meanwhile, declined 7.7% sequentially in July with Indian carriers flying 9.7 million passengers on local routes, according to data from Directorate General of Civil Aviation (DGCA).

Domestic air passenger traffic was 10.5 million in June. While July volumes are better than the 5 million passengers carried in the same month last year, they failed to reach the 11.9 million recorded in the pre-pandemic July 2019.

The sequential fall in traffic was in some part due to cyclicality in passenger travel, mainly arising from the lean period during monsoon coupled with the impact of hardening air travel fares on leisure travel, according to Icra.

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IndiGo carried 5.7 million passengers in July, accounting for a market share of 58.8%. However, the airline had a higher volume at 5.9 million passengers in the preceding month with a market share of 56.9%.

Vistara improved its volume from 0.9 million passengers in June to over a million in July, while the market share jumped from 9.4% to 10.4%. This was the first time that Vistara occupied the second position in terms of market share during a month.

Air India flew 0.8 million passengers in July, up from 0.7 million in June, and improved market share to 8.4% from 7.5%. Go First witnessed a decline in passengers carried from 0.9 million in June to 0.7 million in July, as well as its market share from 9.5% to 8.2%.

SpiceJet’s volumes slipped to 0.8 million passengers in July from one million in the preceding month, while its market share slipped from 9.5% to 8%. In July, DGCA had ordered the low-cost carrier to operate only 50% of its approved flights under the summer schedule for a period of eight weeks due to multiple incidents of technical snags in its aircraft.

AirAsia saw its volumes falling to 0.4 million passengers in July from 0.6 million in June and a corresponding plunge in market share to 4.6% from 5.6%.

“We believe that the domestic air traffic yields have moved up in the range of 25-30% over pre-Covid levels on domestic routes. The industry earnings in FY2023 will continue to reel under pressure owing to the elevated ATF (aviation turbine fuel) prices, coupled with the depreciation of the rupee against the dollar, given that around 35-50% of the airlines’ operating expenses are denominated in dollars,” said Suprio Banerjee, vice president and sector head, Icra.

“Although removal of fare restrictions from August 31 will partially enable domestic carriers to pass on the escalated cost by way of fare hikes, the possibility of such sharp fare hikes is limited, given the intense competition,” he said.

AirAsia again had the best on-time performance (OTP) among domestic airlines, computed for four metro airports — Delhi, Mumbai, Bengaluru and Hyderabad — at 95.5% in July. It was followed by Vistara at 89%, Go First at 84.1%, Air India at 83%, SpiceJet at 82.1% and IndiGo at 80.8%. July was the fourth successive month when AirAsia ranked first in terms of OTP, having reached 89.8% in June, 90.8% in May and 94.8% in April.