AIR Passenger traffic in January grew at its slowest in 52 months even as the market share of Jet Airways slipped to below that of Air India.
Domestic passenger traffic in January grew in single digits at 9.1% year-on-year. Industry watchers attributed the slowdown to higher fares and weaker demand, surprisingly in a traditionally strong month.
The market share for cash-strapped Jet continued to decline – it was recorded at 11.9%, below national carrier Air India’s 12.2% – for January. This happened last in October 2014 when Jet’s market share had stood at 16.4% against 19.5% of Air India.
The passenger growth in January was the slowest since August 2014 when the passenger traffic volumes had increased by 8.3% y-o-y. Domestic air traffic had grown by 19.6% y-o-y during January 2018.
Over 12.5 million passengers travelled by air during last month, compared with 11.46 million in January 2018, the Directorate General of Civil Aviation (DGCA) said in the data released on Friday.
According to experts, average domestic fares were up 9% y-o-y in January which was reflected in the lower passenger load factors (PLF). All scheduled carriers, with the exception of AirAsia India, reported a 3-3.5% y-o-y decline in plane occupancy. AirAsia India, a Tata Sons and Malaysia-based AirAsia Berhad joint venture, flew with aircraft 84.6% full in January against 80% a year ago. “Rise in fares is being reflected in lower PLF for all carriers,” Balu Ramachandran, head (air & distribution) of Cleartrip, said.
IndiGo, the largest domestic carrier, said the ticket pricing environment improved in the December quarter, especially in the 0-15 booking window.
“In January, the (yield) trends that we saw in November and December continued within the market and we are obviously content with that,” William Boulter, chief commercial officer, IndiGo, told investors on a post-earnings call.
Passenger yields at all scheduled carriers suffered during Q2FY19 as airlines chose to absorb rising costs like aviation turbine fuel (ATF) and rupee depreciation. Top three carriers – IndiGo, Jet Airways and SpiceJet – posted heavy losses of between `390 crore and `1,200 crore. Since then, yields have improved at these carriers as reflected in Q3FY19 results in which IndiGo and SpiceJet made profits and Jet trimmed its losses.
In terms of PLF, low-cost airline SpiceJet continued to remain in pole position among all key scheduled carriers at 90.9%, down 4.3% y-o-y, while IndiGo recorded a PLF at 86.4%, down by 3.6% y-o-y.
National carrier Air India reported a 5.4% y-o-y dip in PLF at 80%, while Jet Airways flew with 86.1% passenger occupancy, down 2.9% y-o-y. Vistara, a joint venture between Tata Sons and Singapore Airlines, reported a 3.2% y-o-y decline in PLF at 84.2% and Mumbai-based Go Air recorded PLF at 87.4%, down 2.8% y-o-y.
Domestic air traffic has been growing at 18-20% y-o-y in the last four years on the back of low fares and rising personal income.
Aviation consultancy firm CAPA India has projected domestic traffic to grow between 14% and 16% y-o-y in FY20.