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Air traffic nosedives 15%; govt plans cell to monitor fares

Oct sees the sharpest fall in traffic this year, in what was expected to be a redeeming month for carriers
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First Published: Tue, Nov 20 2012. 05 34 PM IST
The DGCA said high ticket prices kept potential passengers away. Photo: Hemant Mishra/Mint
The DGCA said high ticket prices kept potential passengers away. Photo: Hemant Mishra/Mint
Updated: Tue, Nov 20 2012. 11 27 PM IST
New Delhi: Airline passenger traffic in India dipped 15.7% in October compared with a year ago, according to data released on Tuesday by the Directorate General of Civil Aviation.
This is the sharpest fall in traffic this year, in what was expected to be a redeeming month for Indian carriers.
The October-December quarter is peak season for domestic airlines and while the air traffic has been falling in the previous months, airline executives had hoped October will reverse the trend.
“It’s disappointing. But we are not astrologers,” said an airline official, who spoke on condition that neither he nor his firm be named.
Air fares were high but there were other complications driving the decline, according to the aviation ministry.
“Air fares are very high, airport charges are very high, and economy is down. First thing people cut is travel,” aviation minister Ajit Singh said, adding that air fares are not regulated by the government but he was tackling this at two levels.
Singh said he has asked state-owned airport operator Airports Authority of India to put in its own equity into big airports in Mumbai and Delhi, which will reduce airport charges and make fares cheaper.
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Singh said he has also directed his ministry to establish a fare-monitoring cell by next week.
“We cannot regulate air fares, and we don’t want to. It’s a free enterprise. But how they set these limits needs to be checked. How can they set a range from Rs.10,000 to Rs.50,000? It’s meaningless. I have received many complaints,” he said.
India’s airlines flew 4.5 million passengers last month, compared with 5.4 million in October 2011, the regulator said, as high ticket prices kept potential passengers away.
The only silver lining, data showed, was for Air India Ltd. The flag carrier became the second largest airline in India, beating private carriers SpiceJet Ltd and Jet Airways (India) Ltd, which are the third and the fourth largest, respectively, now. IndiGo maintained its position as the largest domestic airline in India.
Air India’s share increased to 20.8%, followed by SpiceJet (19.1%), Jet Airways (18.1%), GoAir (7.6%) and JetLite (6.6%). IndiGo’s share gained by 27.8%.
Air India also beat private carriers, except IndiGo, in flight occupancy.
Its flights were 74.7% full, while IndiGo’s were 77.2%. Jet Airways had the lowest flight occupancy of all the airlines at 67.5%
Kingfisher Airlines Ltd did not operate any flights in the month, likely benefiting Air India the most.
An official with a foreign airline who tracks the sector closely said India’s airline consumers are “falling off” and this was a “worrying trend”. He, too, spoke on the condition that neither he nor his firm will be named.
Customers are using trains again or taking fewer trips, he said. “I think this situation will continue as no airline has enough incentive to lower fares, unless a major new firm enters the market,” he added.
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First Published: Tue, Nov 20 2012. 05 34 PM IST
More Topics: airlines | kingfisher | air india | dgca | spicejet |
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