For the five months of the current fiscal, the domestic passenger volume witnessed a muted 2 per cent growth year-on-year, Icra said in the note.
Indian airlines international air passenger traffic degrew 8.2 per cent in August as against a 3.9 per cent growth in the domestic volume in the same month, with market share declining to 34.2 per cent in the month due to under-performance, rating agency Icra said in a note. Moreover, the traffic growth on overseas routes in the first five months was negative at 12.2 per cent as compared to 0.1 per cent negative growth in the period year-ago, Icra said.
The market share of the Indian carriers on international routes declined by 377 basis points year-on-year to 34.2 per cent in August on account of the under-performance, though it witnessed a sequential improvement of 214 basis points. “Given the favourable international scenario, domestic airlines likely to expand further capacities on international routes in the near future to tap the opportunity.
The domestic space, however, will continue to remain critical for the carriers as it provides sizeable potential as well as feed-in traffic for the international routes,” said Kinjal Shah of Icra. Also, as the airlines continue to expand their fleet, resulting in a gradual correction in the demand-supply imbalance and thus a further moderation in airfares, the domestic passenger traffic growth is expected to increase in the near-to-medium term, she added.
For the five months of the current fiscal, the domestic passenger volume witnessed a muted 2 per cent growth year-on-year, Icra said in the note. “The growth in the industry capacity (measured in available seat kilometres ASKMs) continued to be muted in August at 2.4 per cent, primarily due to Jet Airways grounding in April,” she said.
Furthermore, due to the increased capacity deployment by some of the carriers on international routes, the domestic ASKM growth was a marginal 2.4 per cent in the April-August period of the fiscal, she added.