In 2007, a year that witnessed three domestic airline mergers in India and saw an easing of a bruising price war among airlines, Jet Airways India Ltd, the oldest private carrier in the country, and state-run Air India yielded share to start-up carriers in a passenger market that expanded about a third, latest data from the government shows.
Jet Airways’ share dropped from 31.2% in 2006 to 22.6% in 2007 although the acquisition of Sahara Airlines Ltd (now JetLite India Ltd) helped it retain the mantle of the largest airline group in India with a 29.9% share of the 43.3 million passengers who flew Indian skies last year. This customer base grew 32.51% in 2007 over the previous calendar year.
Jet Airways’ share was eaten into by both Kingfisher Airlines Ltd and discount carriers, an aviation expert said. The airline “finds itself sandwiched between the two,” said Subodh Gupta, an aviation analyst at NM Rothschild India Pvt. Ltd. “The business traveller has been taken away by Kingfisher and the bottom layer has been taken away by the low-cost carriers especially on metro routes.”
Kingfisher Airlines saw its share increase by 3.5 percentage points in 2007 while Deccan, an airline Kingfisher owner UB Group controls, lost 1 percentage point in the same period. Together, the group reported a 29.3% share.
Air India’s share dropped to 19% from 21.5% in 2006.
Wolfgang Prock-Schauer, chief executive of Jet Airways, attributed the decline in market share of his airline to a slow addition of capacity. The airline added just three aircraft compared with the 40 more that all other airlines put together did. “We will be adding six ATRs and two more (jet) aircraft in our fleet,” he said.
But that addition may not be enough given that other airlines plan to do more. Low-fare airline IndiGo added nine planes last year, helping it grow its share to 7.6% from 1.3% in 2006. It plans to add at least one aircraft every six weeks this year. Another low fare airline Go Airlines India Ltd saw its share climb to 4.2% from 2.8%, while SpiceJet Ltd’s share moved up from 6.9% to 8.8%.
The industry load factor, a measure of the percentage of seats with passengers on a plane, increased from 70.1% to 71.5%.