Air traffic growth slumps in Jan-Jul

NEW DELHI : Air passenger traffic in India grew 3.1% in the first seven months of 2019—the slowest pace in at least five years—amid market uncertainties in a slowing economy and the grounding of Jet Airways (India) Ltd.

About 82.56 million passengers travelled on domestic routes during the January to July this year, compared with 80.04 million passengers a year earlier, showed data issued by the Directorate General of Civil Aviation on Thursday.

Domestic air traffic grew nearly 22% in the year-earlier period, while it grew 17.18% during January to July 2017.

“The meagre growth is due to the overall economic slowdown of the economy,” said Mark Martin, chief executive officer of Martin Consulting LLC, an aviation consultancy.

“The grounding of Jet Airways, and Boeing 737 Max has further contributed to the slowdown,” Martin said, adding several corporates are opting for video conferencing to hold meetings instead of flying their executives across the country.

During January to July, InterGlobe Aviation Ltd’s IndiGo carried 5.69 million passengers, registering a 47.8% market share, while SpiceJet that flew nearly 1.85 million passengers, registered a 15.5% market share.

Air India, which flew nearly 1.48 million passengers during the period, recorded a market share of 12.4%.

Incidentally, India’s largest domestic carrier IndiGo expects ticket bookings in the 0-15 day window, considered a key revenue-earning window for airlines, to stay weak and add pressure to unit revenues in the quarter, CEO Ronojoy Dutta said at an analysts’ conference call in July.

“Unfortunately, we are witnessing some lower fares in the 0-day to 15-day booking window and expect this to add some pressure to our unit revenues in the second quarter,” Dutta had said.

IndiGo has also lowered its capacity guidance for July-September quarter to a 28% increase in terms of ASKs, as compared to a 30% increase in ASKs for the full fiscal.

Other airlines also expect headwinds in the coming quarters, especially during the June-to-August period, considered a seasonally weak for travel.

“The slowdown in rate of passenger growth is worrying since Indian airlines have placed huge aircraft order considering double- digit growth in the coming years,” said an official of an airline, who didn’t want to be named. “We will have to see if the slowdown persists beyond the seasonally weak quarter (June-August 2019),” the person said adding airlines may be forced to drop fares to attract passengers if the slowdown persists.

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