Domestic air traffic rebounds with 7.25 % growth

For first time since March both capacity and demand in market saw a positive growth in July

Domestic air traffic registered strong 7.25 % growth in July on a year-on-year basis as air fares dropped nearly 20%. Domestic airlines flew 4.86 million passengers last month in comparison to 4.5 million passengers in July 2012.

Air traffic dropped 1.84 % in June after a month of positive growth in May. April-June quarter is good season for travel as it coincides with school and college holidays but July-September is a lean season.

"The market slowed down in second half of 2012 because fares remained relatively higher despite collapse of Kingfisher Airlines. This time the fares are nearly 20% lower. Airline yields were down in July and the same trend will continue in August. We are expecting a double digit growth in August,'' said Sharat Dhall, chief operating officer of online portal Yatra.com

“Typically peak season gets over in June due to which air fares came down in July and led to a relative rise in air travel. Also with 2 long weekends in August, we have seen a significant rise in number of travelers this month as well,'' said Vikram Malhi, general manager of portal Expedia.

For the first time since March both capacity and demand in the market saw a positive growth in July.

Domestic airlines are now offering incentives and discounting sales to push up volumes as traffic slows down during July-September quarter. Industry sources say that discount fares are being offered to increase its market share and boost forward bookings.

IndiGo maintained its leadership position with 29.7 % share and today added Ranchi as a destination. Jet Airways retained the number two spot with 25.3 % share. SpiceJet which is facing a leadership crisis following resignation of CEO Neil Mills saw its share drop to 17.5 % while Air India's share remained at 19.7 %.