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IndiGo, Air India and Akasa Air set passenger traffic records in November
India's aviation sector saw record traffic in November 2024, with IndiGo, Air India, and Akasa Air achieving historic milestones. IndiGo led with 10 million passengers, while Air India benefited from its merger with Vistara. Akasa Air also made a comeback, boosting its market share.
The Indian regulator, the Directorate General of Civil Aviation, released the traffic numbers for November on Monday, December 23. The month recorded the best-ever traffic for domestic Indian aviation in history. The impact extended to both airports and airlines, with Delhi airport stating that it was the best month for the airport. It now turns out that three airlines also recorded their best-ever performance.
IndiGo all the way
The airline became the first carrier to fly 10 million (1 crore) passengers in a single month in India. It flew 90.7 lakh domestic passengers, while the rest were international. This is also the highest domestic passenger count for the airline since it started eighteen years ago. This beats the previous best of 86.4 lakh passengers seen in October 2024 and 85.26 lakh passengers in December 2023. In all probabilities, the airline will beat its November best in the current month.
This propelled the airline to an unassailable market share of 63.6 per cent, its highest ever. This comes against the backdrop of the airline citing the “normalisation of demand” and pressure on yields while announcing its Q2-FY25 results a few weeks before the start of November, when it reported a loss after seven consecutive quarters of profit. IndiGo is now 1.5 times what it was at the onset of COVID on the domestic side of the business, while international operations have grown even more.
Merger propels Air India
Air India (including Air India Express) had 34.73 lakh passengers in April and a market share of 24.4 per cent. This month, Vistara merged into Air India, and for the first eleven days, Vistara operated as a standalone entity. The regulator also counts Air India Express numbers as part of Air India, with Air India Express being a wholly owned subsidiary of Air India.
The merger has propelled it to handle over 30 lakh domestic passengers for the first time in history. This will only go up in December as it becomes the first full month of operations after consolidation into two airlines - a full-service Air India and a low-cost offering - Air India Express. With high load factors being recorded, how soon will the airline reach its stated goal of 30 per cent market share? Incidentally, it lost market share in November, recording a 27.3 per cent share, compared to what it had with four airlines in October, which closed with a 29.2 per cent market share.
Akasa Air making a comeback
Mumbai headquartered Akasa Air, which had hit an air pocket in 2023 after issues with pilots, had seen a steep drop in utilisation, passengers carried and subsequent market share. While it may not have had many inductions this year, the increased utilisation is getting the airline back in the game. It saw 6.74 lakh domestic passengers in November 2024, with a market share of 4.7 per cent. This beats its previous best of 6.64 lakh passengers, which it carried in May 2024, and 6.29 lakh passengers in May 2023.
The airline has a long way to go on multiple counts. The market share is a function of capacity in the market, and SpiceJet’s wet-leased addition, along with plans to get their own aircraft back in the air, will put pressure on the market share of Akasa Air. What would matter, though, is not the market share but profits and how soon Akasa Air can become profitable. With the market moving towards a duopoly and SpiceJet’s long-term financial issues, Akasa Air has always had a golden chance, part of which was definitely missed due to Boeing, its quality issues and delivery delays.
Tail Note
The domestic industry in India has already crossed the 2023 figures. December 2024 is turning out to be a stellar month, with traffic being 3 per cent higher than November. However, with all the euphoria around the domestic traffic, including reaching the 5 lakh passengers per day mark for the first time and then seeing it repeat a few times, the overall growth this year has been in a modest 5 per cent - 6 per cent range. Even with this low growth in passenger traffic, there is resistance to increasing airfares, with the issue coming up for repeated discussion even in parliament.
Can airlines push fares to recover their costs, or will a rapid induction phase lead to discounting to attract passengers and strain the airline's finances one more time? For a long time, cost was the differentiator in India. With Air India focusing on premium offerings but restricting itself to a few routes, the offerings in the market will change significantly in 2025. How will it be for the passengers? The chances are that passengers will pay more than ever.
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Business NewsNewsBusiness Of LifeIndiGo, Air India and Akasa Air set passenger traffic records in November
First Published:24 Dec 2024, 12:55 PM IST
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