Air passenger growth slow as airlines focused more on international play after Jet Airways chaos

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Published: August 29, 2019 2:44:53 PM

While several domestic airlines ramped up their operations to fill Jet Airways created a void in the previous few months, the same has not spelt much success in terms of air passenger growth.

A slew of domestic and international flights was launched in the past few months, however, most of them were international flights. (REUTERS)

While several domestic airlines ramped up their operations to fill Jet Airways created a void in the previous few months, the same has not spelt much success in terms of air passenger growth. For the July month, the passenger volume was up by only 3% on-year and though the July quarter is a seasonally slow time for carriers, a muted capacity expansion could also be one of the reasons for the subdued growth, a recent report by ICRA said. Also, even when a slew of domestic and international flights was launched in the past few months, most of them were international flights. 

Indigo and SpiceJet together accounted for about 62.8% of the domestic airline industry capacity during June 2019 … However, the addition has been higher on the international routes than domestic, thereby impacting the overall domestic industry capacity addition,” Kinjal Shah, Vice President and Co-Head, Corporate Sector Ratings, ICRA, said.

However, India has about 30 more planes at 600 compared to 570 planes at the same time last year, Pradeep Singh Kharola, Secretary, Civil Aviation Ministry told reporters on Thursday. The Indian aviation took a double hit this year with first, the grounding of Boeing 737 MAX aircraft globally after Ethiopian plane crash tragedy and then a sudden shut down of operations of Naresh Goyal-founded Jet Airways. The same had a far-reaching consequence for domestic aviation with the domestic available seat kilometres growth muted at 2.0%. “This is majorly attributed to the eventual discontinuation of the operations of Jet Airways with effect from April 18, 2019,” Shah added.

However, the passenger growth is expected to pick up if airlines go ahead with an expansion spree. The same will also cause a moderation in air ticket prices as there will be a gradual correction in the demand-supply imbalance. “The domestic passenger traffic growth is expected to increase in the near to medium term,” Shah said. 

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