The Hindu Business Line : Air passenger growth slows down

The latest data collated by the Airports Authority of India point to a slowdown in the aviation industry with the number of passengers passing through Indian airports growing at about 11 per cent in the first quarter of the calendar year. This is against the near 28 per cent growth recorded in the first three months of 2007.

The slowdown is being blamed on a variety of factors, including airlines rationalising their schedules, a move that has led to fewer reduced rate tickets being available and the efforts being made by the Railways to woo back low-end travellers.

Among the major international airports, Chennai, for instance, in January this year, registered a growth in passenger handling of 4.2 per cent, against 33.5 per cent in January last. Mumbai saw a growth of 10.2 per cent against a surge of 19 per cent last year while Delhi notched up a growth of 11.5 per cent against 25.9 per cent in the same period.

The Chief Executive Officer, Centre for Asia Pacific Aviation, Mr Kapil Kaul, however, felt that it is not possible for the industry to constantly grow at the 20-30 per cent levels witnessed earlier. “For stable growth in the future, much will depend on the manner in which fuel prices move as airlines can neither absorb the entire increase nor pass it on to the passenger,” he warned.

The scenario is likely to become bleaker in the coming days with domestic airlines considering another round of fare hike to offset the global increase in oil prices.

“The industry is anticipating a 5-6 per cent increase in oil prices next month. We may have to increase the fuel surcharge by another Rs 150-200,” said an official of a low-cost airline.

But to offset the increase in surcharge, some airlines plan to have a three-tier system instead of the current two-tier system. At the moment, airlines follow a two-tier surcharge formula charging Rs 1,950 for distances below 750 km and Rs 2,350 for longer flights.