Fall in passenger numbers as domestic airfares rise

Geneva, Dec 13:  

The decline in domestic air travel in India is an adjustment to the unsustainable levels noticed earlier, the Chief Economist, International Air Transport Association (IATA) Brian Pearce said on Thursday.

“It is hard to say what the level should be. It is for the market to work out what will be a justifiable rate (for growth).

“What we saw earlier was tremendously rapid growth in air travel. With very low fares, we saw huge losses in most airlines. Now we are seeing adjustments among airlines. This is reflected in increase in cost of travel and fewer seats. Airlines are in less trouble and we have seen a reduction in losses. We are approaching more of a balance,” Pearce told Business Line.

After showing growth for several years, the number of passengers carried by domestic airlines in India has been declining since the beginning of the calendar year 2012.

During October this year, there was a decline of over 15 per cent according to data released by the Directorate General of Civil Aviation.

Analysts in India point to rising domestic airfares as the primary reason for decline in passenger numbers.

Worried at the sudden spurt in domestic airfares, Civil Aviation Minister Ajit Singh has emphasised bringing about greater transparency in pricing of air tickets in India.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/fall-in-passenger-numbers-as-domestic-airfares-rise/article4197010.ece