Airlines close busy season on poor note, tough weeks ahead

Airlines close busy season on poor note, tough weeks ahead
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First Published: Tue, Feb 17 2009. 12 55 AM IST
Updated: Tue, Feb 17 2009. 12 55 AM IST
New Delhi: India’s domestic airlines saw passenger numbers shrink by about one-sixth in the peak travel season from October to January from the year ago, data released by aviation regulator Directorate General of Civil Aviation showed on Monday, taking the number of people flying back to the levels seen in the winter of fiscal 2007.
Eight scheduled airline firms in the country, such as National Aviation Co. of India Ltd-run Air India and SpiceJet Ltd, carried 12.78 million passengers between October and January, compared with 15.35 million in the same months of last fiscal year. In 2006-07, the comparable passenger data was 12.66 million.
October to January is the busy season in India as domestic travellers and foreign tourists travel on festivals and winter holidays.
In January, airlines carried 3.33 million passengers, which remained unchanged from the 3.32 million in December.
The zero expansion was reported despite all carriers dropping airfares by as much as 50% in December and January as demand for tickets waned after the Christmas and New Year holidays.
The January data does not augur well for the industry, one expert said. “Low fares coupled with low load factors can be a recipe for disaster,” said Aloke Bajpai, chief executive of travel website
Both business and leisure travel are suffering from the economic slowdown, Bajpai added. “They are not growing as fast as compared with last year as corporate budgets and consumer wallets have shrunk. Demand is, therefore, not up to the same level.”
A senior Air India executive, who asked not to be named, said the fare cuts in January had clearly not worked. “We were trying to stimulate demand. The objective was not met,” he said.
Full-service airlines such as Jet Airways (India) Ltd flew its aircraft 64.8% full in January, while Kingfisher Airlines Ltd (including low-fare service Red) reported 64%, and Air India at 60.2% compared with 60%, 62.8% and 60%, respectively, in December.
Low-cost airlines such as IndiGo, run by InterGlobe Aviation Pvt. Ltd, and SpiceJet reported their aircraft 72.2% and 68.3% full, respectively, compared with December’s 75.5% and 69.6%.
Kingfisher Airlines continued its December lead to be the country’s largest airlines by passenger share carrying 27.9% of travellers in January. Jet Airways cornered 25.1% and Air India 16.7%.
IndiGo reported 13.7%, SpiceJet 11.8%, GoAir 2.4%, Paramount Airways Pvt. Ltd 2.1% and MDLR Airlines Pvt. Ltd 0.4%.
Almost all airlines have revised air fares upward since 6 February. The hikes were followed a week later by a fall in jet fuel prices, which softened to levels comparable to 2005 prices.
The cheapest economy air ticket for Delhi-Mumbai flight for next week is now available at Rs3,083 on Air India even as low-fare airline tickets come for Rs4,925 for IndiGo and Rs5,983 for Jet Airways.
Some of the effects of higher airfares are already showing in passenger numbers and Bajpai said he expects the next eight weeks to be the toughest for airline firms.
An impression among customers that fares are high again will hurt the airlines, he said, adding, “what we are seeing as a result is a dip marking the beginning of the lean season.”
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First Published: Tue, Feb 17 2009. 12 55 AM IST