Air Passenger Traffic Grows At Slowest Pace In At Least Four Years
The number of passengers flying in domestic airlines fell to its lowest in at least four years in November due to a rise in airfares in the world's fastest-growing aviation market.
Passenger growth stood at 11 percent during the month, the slowest pace at least since January 2015, according to data compiled by BloombergQuint, as the festival season travel was delayed because Diwali fell in November this year. Yet, 11.6 crore passengers flew in Indian carriers.
Indian airlines' fuel consumption had indicated passenger growth had slowed. Oil demand from carriers grew at its slowest in 11 months during the month despite a lower base since Diwali holiday travel fell in October last year, BloombergQuint reported earlier. The Diwali month usually sees a spike in air travel. A decline in air traffic during the holiday season this year would be a concern when airlines are expected to benefit from falling oil prices.
But fares in November were higher by Rs 1,500-2,000 on an average compared with the September quarter, an analyst told BloombergQuint requesting anonymity as he's not authorised to share the data. Kotak Securities and Morgan Stanley, too, agreed that fares were higher.
Hetal Gandhi, director at CRISIL Research, said lower capacity addition in November compared with the first half of the year and higher fares led to slower passenger growth.
Among major airlines, IndiGo and AirAsia's passenger growth was higher than the industry's, while that of Air India and Jet Airways (India) Ltd. declined.
- Passenger growth of InterGlobe Aviation Ltd.-operated IndiGo stood at 21 percent—the slowest in the last six months.
- Air India's passenger growth declined 0.4 percent—the first time in 18 months.
- Passenger growth of Jet Airways fell 7 percent—the most in at least four years.
- SpiceJet's passenger growth stood at 10 percent.
- GoAir's passenger growth was 9 percent.
Passenger load factor—the percentage of seats filled—also continued to decline for all major operators. That's because of lower passenger growth and higher capacity addition. It declined the most for Vistara, followed by IndiGo—the country's largest airline.
IndiGo and AirAsia, however, continued to increase their market share at the expense of other airlines. As of November, Jet Airways' market share fell to the lowest in at least four years.
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