Indian aviation went from strength to strength in 2015, attracting many new players. Three new airlines — Vistara, Air Pegasus and Trujet — took off last year. With this, five new players now compete for passenger patronage in the domestic skies. These players have taken off, but they have a long way to reach cruising altitude and challenge the well-entrenched larger carriers.

Buoyed by low fuel costs, which enabled fare cuts, air passenger traffic in the country grew at over 20 per cent last year, amongst the fastest in the world. A rapidly growing market translated into gains for almost all airlines, including the new ones.

For regional player Air Costa, which started flying in late 2013, traffic grew a robust 30 per cent plus year-on-year in the January-November 2015 period. AirAsia India, which began operations in June 2014, flew nearly thrice the number of passengers between June and November 2015 than it did a year ago.

From just 15,000 passengers in January 2015 when it was launched, Vistara — the Tata-Singapore Airlines joint venture — increased traffic nearly nine-fold to 1.36 lakh in November.

The newest carriers in the air, regional players Air Pegasus and Trujet, which started flying in mid-2015, have also notched up good passenger growth in the first few months of their operations. Impressive as it is, the growth of the new airlines comes primarily on the back of a low base. And despite the scorching pace, they remain minor players in a market dominated by the old boys — IndiGo, Jet Airways, Air India, SpiceJet and GoAir, in that order.

Sure, many of the new players, such as Air Asia and Vistara, have increased their market share. Even so, the combined market share of all the five new players in November 2015 was just 5.4 per cent. This was less than the 8.2 per cent share of GoAir, the smallest among the older players.

Market leader IndiGo continues to entrench its position — it grew traffic more than 40 per cent year-on-year in the January-Novemberperiod on a high base. In fact, it carried more than half the additional passenger traffic during the period.

No surprise then that its market share shot up to nearly 37 per cent, up from 31 per cent a year ago.

SpiceJet was the only airline to see passenger traffic shrink last year. That was due to its near-crash-landing in late 2014. But with the change in management, the airline has regained some of the lost ground.

Lower than average passenger growth saw Air India and GoAir cede some market share, while Jet Airways gained marginally last year.

Most airlines, old and new, have ambitious capacity expansion plans for 2016. This may make it difficult for the younger players to increase market share.

That, however, doesn’t seem to perturb them. Says Mittu Chandilya, CEO and MD, AirAsia India: “It’s exciting times. The promising load factors that we’ve seen allow us to now add more capacity in our existing network. We currently operate six aircraft and fly to 10 destinations. We are working towards increasing our connectivity and adding a few more Tier-II destinations.”

Amber Dubey, Partner and Head – Aerospace and Defence, at global consultancy KPMG, feels that “aviation being a volume game, one does not anticipate more than four strong pan-India carriers eventually.”

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