Despite issues, airline sector in India continues to grow

Despite the deep troubles of aviation sector in India, the air traffic has grown over the last three years. 

According to data made available by the Ministry of Civil Aviation, aircraft movement and passenger traffic grew by a Compound Annual Growth Rate (CAGR) of 3.3% and 5.6%, respectively, over the last three years. 

Freight traffic, however, declined by one percent in the given period. 

The current fiscal has been good for the sector as till January, aircraft movements, passengers and freight traffic has increased by 4.5%, 11.8% and 11.7% respectively in comparison to the traffic handled during April 2013- January 2014, the data showed.
 
The ministry said, "The rise in air passenger and air cargo traffic is an assorted result of various factors including economic environment, commercial factors, increased traffic demand and load handling capacity of airports and airlines."

As recently as last week, the aviation ministry hinted at asking airlines to unofficially sign 'anti-poaching' agreements so that cabin crew and pilots' lateral movements are restricted. 

Also Read: Why 'anti-poaching' agreement is a bad deal for the airline sector

Earlier this year, ATF, or jet fuel, prices went up by as much as 8% last week after seven straight reductions since August 2014. Airline companies have refrained from passing on the benefits to their customers and instead strengthened their cash-flows. 

The aviation wars in India has been hotting since the past few months with a new airline Vistara coming into the picture. The airline is a joint venture between India's Tata Group and Singapore Airlines. 

Spicejet, which was on the verge of being another Kingfisher Airlines, is also trying to resurrect itself. Ajay Singh is back at the helm of operations and the Marans have exited the company. The airline has offered many discount schemes since January to lure passengers.