Domestic
passenger traffic fell 15.7 per cent in October, while government-owned Air India (AI) strengthened its market share to
20.8 per cent.
Kingfisher Airlines exited the market in
October and domestic airlines gained market share at its expense. The traffic
fell from 5.4 million in October last year to 4.55 mn in 2012. This was despite
October being a festive season and the start of a strong quarter; the fall was
the sharpest this year. Aviation experts blame the fall on an increase in fares
by 20-30 per cent as compared to last year. Over January-October, passenger
traffic fell 2.5 per cent.
“Ever since the
30 per cent rise in fares, Domestic air traffic has shrunk. It fell 10 per cent in September. A
double-digit decline with each passing month does not bode well for the
economy. One reason why the fall is higher in October is because last year,
Diwali was in that month. While capacity and demand have reduced, airlines have
benefited as yields have improved.,'' said Sharat Dhall, president, online, of
portal Yatra.com.
Adding: "I do not see fares drop till
December-end or early January. You could see some change in fares in
January-March, a low season. The airlines could drop capacity further, if fuel
prices continue to stay high.'' At present, many airlines -- including AI, GoAir and IndiGo -- are selling tickets at discounted
rates for travel in January-March, through special sales.
Last October, Kingfisher flew 900,000
passengers and accounted for 16.5 per cent of the market.
By September, its share fell to 3.5 per
cent and its operations were shut in October, due to a strike and suspension of
its permit.
That load has now been distributed among
the other airlines.
AI was the biggest beneficiary of
Kingfisher’s fall. Its share has risen from 16.2 per cent in May to the 20.8
per cent in October. In September, it was 19.3 per cent. The rise can be
attributed to the airline's efforts to attract business traffic and better
on-time performance, apart from selling low-cost promotional fares.
Civil Aviation minister Ajit Singh has asked AI to further improve its
load factor and on-time performance, while aggressively implementing
customer-friendly initiatives. AI had recently taken several such measures, on
fares and on ensuring maintenance of schedules, coupled with improved utilisation
of its aircraft, the ministry said.
http://business-standard.com/india/news/domestic-air-traffic-sees-sharp-fall-in-october-/493185/
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