Domestic air traffic soars 29% in July

IndiGo continues to dominate the market in July, with a market share of 35.8%

As air fares head southwards, domestic air traffic rose 29 per cent in July compared to the previous year. This is one of the highest levels of growth witnessed in the past several months.

Traffic in the Indian skies has been robust in the current year with airlines offering cheaper tickets to passengers and indulging in fare wars. Primarily helped by a significant drop in the global oil prices, airlines are selling tickets at lower prices and filling up more seats.

The difference between the prices of rail and air tickets has decreased significantly (see chart), allowing passengers to switch the mode of transport.

“In July, average fares were 10 per cent lower than that of last July. This has had a significant impact on driving passenger growth as people shift from other mode of transport to choose air travel. If pricing is lower, immediate shift happens,” said Sharat Dhall, president at travel portal Yatra. Dhall said the sector is witnessing strong passenger growth after four-five years.

Carriers together carried 6.74 million passengers against 5.21 million last year.  In July, Air India, Jet Airways, SpiceJet and Vistara saw a rise in occupancy compared to the previous month.  Jet Airways piped both IndiGo and AirAsia in this category even as SpiceJet witnessed the highest occupancy of 93.4 per cent.

Low-cost carrier IndiGo continued to dominate the market in July with a market share of 35.8 per cent. However, the airline’s share was down from 38.4 per cent in June. The market share declined as Indigo saw the steepest decline in the occupancy level by 8.2 per cent to 78.4 per cent. Indigo recently finalised an order for 250 Airbus A320neo planes, the largest single order for the European plane maker. IndiGo president Aditya Ghosh said he saw a massive opportunity in India, a market which remains “hugely under-penetrated.”

Jet Airways, along with its subsidiary JetLite, saw the highest rise in its market share from 21.1 per cent in June to 22.8 per cent in July. Also, the market share of SpiceJet has been consistently increasing over the past few months as it is on the path to revival. The low-cost carrier’s market share stood at 12.3 per cent in July, a slight rise from 12.1 per cent in the previous month. Air India’s share also rose by almost a percent to 16.2 per cent.

Vistara topped the chart for on-time performance, registering a 93.5 per cent punctuality record followed by Indigo (86.6 per cent), AirAsia (86.3 per cent) and Jet Airways (80.4 per cent). SpiceJet’s on-time performance stood at 63.8 per cent.

Both SpiceJet and Jet Airways, which released their first quarter results recently, swung back in profits helped primarily by a decline in the air fuel prices. With the oil prices continuing to fall, airlines expect this quarter to be profitable. Almost all the airlines offered discount schemes to passengers in the past few months.