Aided by low fuel price and enhanced capacity, the domestic airlines carried 20.6% more passengers in the April-January period compared to the corresponding period a year ago. This was on the back of 11.6% increase in the number of flights on the domestic route.
The first 10 months of current fiscal saw 138.7 million domestic passengers being carried on domestic routes compared to 115 million a year ago. Similarly, the number of flights for April-January period increased to 1.1 million from 1 million earlier.
The growth in both passengers and flights was seen on international routes as well. According to data furnished by the aviation ministry, the passengers on the international routes clocked in at 45.4 million from 42.2 million earlier while the number of flights increased to 0.31 million from 0.28 million earlier.
The data furnished by civil aviation regulator, DGCA, the month of January showed Indigo retaining its lead with 35.6% market share followed by Jet Airways (18.7%), Air India (16%) and Spicejet (13.2%). The other scheduled airlines making up the rest of the market include GoAir, Air Costa AirAsia India , Vistara, Air Pegasus and TrueJet.
The surge in growth is primarily a result of falling prices of aviation turbine fuel (ATF) as a result of drastic drop in crude oil. In 2015, the price of benchmark Brent crude oil fell 35%, while in 2014, it declined by 48%. The Indian airlines have reaped the benefit of low cost fuel as it accounts for nearly half of the total cost of domestic airlines.
International and domestic Traffic combined has grown during Apr 15-Jan 16 by 17% despite an increase in aircraft movement by 11%. This means better utilisation of capacity. Since airlines haven’t indulged in irrational fare wars, this means higher profits,” Amber Dubey, partner at KPMG said.
Although the government has downplayed the recent hike in excise duty on ATF to 14% from 8% saying that the airlines would be able to absorb the increase, Dubey said that it could prove to be a dampener as this goes against the stated objective of the government to make flying affordable to the masses.