Flying fares didn’t disrupt air traffic growth in November

There seems to be no twists to India’s aviation growth story — not even flying airfares.

Data for November put out by the civil aviation ministry on Monday bears this out.

The number of flyers in the domestic market jumped around 6% in November to 48.75 lakh from 46.17 lakh in October.

Year on year, that’s a growth of 26.68% from 38.48 lakh.

Almost all the local airlines registered high seat factors despite the fact that air ticket prices of some low-cost airlines were hovering over Rs25,000 per passenger on long-haul flights in November due to the festive season.

As per the ministry data, the seat factors of airlines ranged between 70% and 90% with IndiGo recording the highest at 91%.
Though, this was not the budget airline’s highest seat factor this year. In May, Rahul Bhatia-promoted no-frill airline had logged a seat factor of 93.2%.

Last month, IndiGo also overtook Air India in terms of market share as it expanded its aviation pie to 17.3% from 16.8%, moving to the third position. Air India slipped to fourth position as its share in the local market dropped to 17.1% from 17.7%.

An industry expert said the budget airline has been able to fly past the state-owned Air India because of its aggressive capacity addition.

“Air India and IndiGo were close competitors until a few months back. However, last month the gap between the two widened with Air India emerging victorious. I think the reason behind IndiGo’s improved performance last month lies in the fact that it induced new aircraft in its fleet. Also, Air India has its own internal issues,” said an industry expert, who did not want to be named.

This was refuted by an airline executive, who wished to remain anonymous; “IndiGo added one aircraft in November and that too in the second half of the month. The airline was able to move ahead of Air India because of high load factor (91%).”

Naresh Goyal’s airlines — Jet Airways and JetLite - maintained lead in the domestic market with a share of 26.2%, which was unchanged from October.

Kingfisher Airlines increased its market share by one percentage point to 19.1% while SpiceJet lost three percentage points and GoAir gained three percentage points.

But despite the growth in passenger numbers, the industry is not expecting yields - net revenue per seat — to firm up. In fact, a senior executive of low cost airline said overall airline yield in November was lower by Rs100-150 per passenger compared to the same month last year.

“This (lower yield) was because the competition this year is much stiffer than last year. Airlines are adding capacity with growing demand and that has eased our yield. We are also grappling with climbing ATF (aviation turbine fuel) prices, which is up by 35% compared with last year,” he said.

For the whole year, the industry is estimating yields be up by 5-7%.
The overall cancellation rate last month was slightly up at 1.5%. A majority of the cancellations were due to technical faults and bad weather. The on-time performance (OTP) of airlines was 76.4%.