Demand for air travel drops 5% in June despite lower capacity

In June, the domestic airline industry witnessed an almost five per cent decline in air travellers.

This was the second successive month that reflected a trend of more seats being available on aircraft than passenger demand.

This trend is indicated by the latest data released by the Directorate General of Civil Aviation (DGCA).

Fall in demand

The data show that demand for air travel fell by 4.46 per cent in June this year. Interestingly, airlines reduced capacity by less than one per cent – the first such instance in last one year period.

High fares

In June, the domestic airlines carried 51.08 lakh passengers compared with the 53.12 lakh passengers flown in the same period last year.

Analysts feel that the decrease in passenger demand was largely driven by high fares.

But if the January-June period is considered, then the growth story in the aviation sector continues.

In January-June, the domestic airlines flew 309.16 lakh passengers, an increase of 3.71 per cent over the same period last year.

Rankings

During the latest month under review, the combine of Jet Airways and Jet Lite were the market leaders with a market share of 27.4 per cent, followed by Delhi-based low-cost airline, IndiGo (26 per cent).

SpiceJet was at third position with a market share of 18.6 per cent, followed by Air India (Domestic) at 16.8 per cent.

The cash-starved Kingfisher Airlines was at the bottom of the list with a market share of 4.2 per cent. Analysing the data, the Head, Strategic Marketing and Strategic Alliance, Yatra.Com, Mr Pratik Mazumder, said that while there was the ‘desire, intent and aspiration’ of people to travel by air, there was an incremental increase in costs of almost Rs 20,000 for a family of four.

“Prices of air tickets were up by nothing less than 50 per cent going up to 80 per cent.”

What this meant was that if the average price of an air ticket was earlier between Rs 4,000 and Rs 4,500 it went up to Rs 7,000, he said.

The Chief Executive Officer, Indian Subcontinent and Middle East, Centre for Asia Pacific Aviation, Mr Kapil Kaul, felt the reduction in capacity by Kingfisher Airlines, coupled with the increase in fares due to the peak season, were among the factors that saw a decline in demand.

Despite what is being noticed at the moment, we expect the sector to close the fiscal with a growth of 7-8 per cent, driven by low fares offered in the off season, Mr Kaul said.

> ashwini.phadnis@thehindu.co.in

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