New D elhi: Air passenger traffic continued to shrink for the fifth consecutive month, dropping by a record 12.4% in September, as high fares and a slowing economy dented demand.
Only 4.01 million passengers flew in September compared with 4.58 million in the same month last year, according to the Directorate General of Civil Aviation (DGCA).
“Both the capacity and demand are gradually decreasing,” DGCA said in its analysis of airline traffic in India for September. Air traffic has been falling since May. It fell 0.87% in that month, 3.84% in June and 3.70% in August from the respective year-earlier periods.
On a stand-alone basis, Air India took over Jet Airways (India) Ltd in marketshare, a first in recent times. Air India’s marketshare was at 19.3% in September while Jet Airways was 18.1%. SpiceJet Ltd was at 18.5%, GoAir at 7.6%, Jet Konnect at 5.7% and Kingfisher Airlines Ltd’s 3.5%. IndiGo led with a 27.2% marketshare.
Airfare in India are likely to rise in the winter season as domestic flight capacity is down 19% from a year earlier, Mint reported on Thursday.
The reduction is in part because of Kingfisher closing operations earlier this month and a decline in the number of flights by Jet Airways and Air India.
SpiceJet, GoAir and IndiGo are increasing flights in the winter season but that will still not fill the gap created by Kingfisher’s exit till the end of the year, said an airline official, who declined to be named.
Kingfisher’s flight schedule for winter season ending March has not been approved by the regulator. The airline had 2,930 weekly flights in winter last year.
The peak travel season starts this week and goes on till 10 January.
Jet Airways will reduce flights by 10.9% and Air India by 6.2%. SpiceJet will increase flights by 8.87%, GoAir by 14.8% and IndiGo by 30%, DGCA said.
Kingfisher’s absence has hit connectivity. Only 73 airports are now connected by flights compared with last year’s 82, DGCA said.
Still, reduced capacity is good for airlines, according to a research report.
“In the near term, Indian airline companies will benefit from (a) appreciating rupee, (b) temporary shutdown of Kingfisher, (c) capacity discipline and (d) improvement in utilization and yields due to onset of busy season,” Bank of America Merrill Lynch said in its 11 October report on Jet Airways and SpiceJet.
“While we expect weak Q2FY13 results on account of seasonality, we could see a sharper than expected recovery in the seasonally strong Q3.”
The report added Kingfisher’s lockout has been good for rivals.
“This is another marginal positive for the remaining carriers as this further consolidates the industry and eases supply prior to the busy season,” the report said. “Additionally, the show-cause notice by the regulator further puts a question mark on Kingfisher’s return. We do not expect Kingfisher to normalize its operations in the near term.”