New Delhi: High airfares and fewer flights led to an 8.7% decline in the number of air passengers in August from a year earlier.
Airfares may hit record highs in the winter months, according to a travel industry expert.
The number of passengers who chose to travel by air fell to 4.4 million in August, from 4.8 million in the same month last year, according to the Directorate General of Civil Aviation data released on Tuesday.
The number of fliers in July, too, had declined 10%.
It is wrong to term this as a “recession,” said a senior airline executive who did not want to be named.
“Passenger growth may be marginally down but yields are up. Passenger growth is also down because fares (are high and) are driven by higher fuel costs and airport charges,” this executive said.
“See what will happen between October and January. The market will be on fire and there will be a severe shortage of planes in the country.”
And with fewer flights, airfares will rocket, too, this person added.
“Book in advance. Be ready to pay more if you book closer to travel,” travel firm MakeMyTrip’s chief operating officer Keyur Joshi said.
American Express India said in a report that airfares in India, across domestic and international flights, have seen an increase of 9% quarter-on-quarter, with domestic fares within India rising by 29%.
“We believe the environment will continue to remain dynamic, and to stabilize expenses on business travel, companies should look at cost-effective travel programmes and execute multi-year contracts with key domestic and international carriers,” said Sandeep Shastri, vice-president and general manager Global Business Travel, American Express India.
Domestic airlines saw their occupancy drop in August. Air India and Jet Airways (India) Ltd had occupancy rates of 66%, and the ailing Kingfisher Airlines Ltd, 53.2%.
Low fare airlines JetLite had an occupancy of 68.6%, SpiceJet Ltd 67.2%, GoAir 67.7%, and IndiGo 73.4%.
While Air India improved its August market share from 17.4% to 18.2% year-on-year, IndiGo was the biggest gainer with its market share increasing to 27.6% from 18.7%.
The share of Jet Airways and JetLite slid further to 25.2% from 26.3%, SpiceJet’s share increased to 18.5% from 13.4%, and Go Air’s from 5.3% to 7.4%. Kingfisher’s market share was down to 3.2%.
A second airline executive who, too, didn’t wish to be identified said costs for airlines have also gone up significantly. Compared with last year fuel prices are up 25% while the rupee is down 18% this year.
“This means on account of oil prices alone an airline’s costs went up 12.5% besides currency, airport charges and service tax,” this person added. “All this is reflecting in fares.”