Indian domestic airline passenger traffic is starting to look up. This is testified by the rise in the number of passengers flying within the country.
The domestic traffic will see a modest revival from the third quarter of 2009-10. This will be helped by the overall direction of the economy, which is beginning to recover and the domestic market, led by low-cost carriers (LCC) that will lead a low-fare regime. These factors will lead the domestic market back to the growth path. However, red ink would continue to chase the airlines, as yield dilution will be very significant and not recover costs, said Kapil Kaul, CEO (Indian Subcontinent and West Asia), Centre for Asia Pacific Aviation (Capa).
The number of domestic air passengers rose 5.7 per cent year-on-year in June to 3.7 million. This has led to speculations that recovery is on the way, a research by Capa shows. But, Kaul added: “We need to remember that there had been a capacity contraction. It fell 10-12 per cent over 2008-09.”
Data from the Ministry of Civil Aviation show the market, which contracted for 12 months in a row from June 2008 to June 2009 is now set for a turnaround. Traffic seemed to have bottomed out in November 2008, when passenger numbers slumped 21.7 per cent year-on-year.
But, a modest recovery could be expected in October, said Kaul. Driven by the LCCs, the real growth phase will begin in 2010-11. Capa expects LCCs to dominate the domestic market, with 70 per cent capacity, in the next 3-6 months.
According to the Ministry of Civil Aviation, all domestic carriers, both full-service and low-cost, increased their passenger traffic in excess of 12 per cent year-on-year in June, including national carrier Air India, which grew 17.5 per cent. IndiGo showed an increase of 19.4 per cent, SpiceJet grew by 29.5 per cent, Paramount rose by 58.7 per cent, Kingfisher Airlines by 79.5 per cent and GoAir 86.1 per cent.
Kingfisher’s figures are an aggregate of both Kingfisher and Deccan traffic, which has been combined since November 2008. GoAir’s passenger numbers for June increased off a small base in June 2008, when the carrier’s traffic slumped 25.5 per cent year-on-year.