India’s Air Passenger Growth Rebounds In August Amid Slowdown
According to DGCA data, GoAir picked up most of the market share that IndiGo lost in August, while SpiceJet’s pie remained flat.
Air passenger growth rebounded in August amid the India slowdown.
The number of passengers flying Indian airlines grew at 4 percent year-on-year last month, the worst pace in August in at least six years, according to data compiled by BloombergQuint from the Directorate General of Civil Aviation. That compares with the 18 percent monthly average passenger growth in the last five years. Nearly 1.18 crore passengers took to the skies in August, the DGCA data showed.
Passenger growth rebounded as airfares fell with capacity levels returning to normal. The grounding of Jet Airways (India) Ltd. in April had resulted in significant capacity reduction in the domestic market, leading to a surge in ticket prices.
SpiceJet Ltd., India’s second-largest airline, reported faster air passenger growth than market leader IndiGo, operated by InterGlobe Aviation Ltd., for fourth straight month. Tata Group-controlled Vistara and AirAsia India continued to grow faster than larger rivals.
Here’s how the year-on-year passenger growth of airlines fared in August:
- Passenger growth of IndiGo stood at 16.5 percent—slowest in six months.
- SpiceJet’s air passenger growth stood at 30.6 percent.
- Air India’s air passenger growth stood at 5 percent.
- GoAir’s air passenger growth stood at 37.2 percent—highest in 13 months.
- Passenger growth of AirAsia India stood at 42.1 percent—highest in 10 months.
- Passenger growth of Vistara stood at 61.7 percent—highest in two years.
Passenger load factor, percentage of seats filled or a measure of capacity utilisation, fell for only two major airlines in India over the last year. Seat occupancy of SpiceJet dropped in August but it still managed to maintain its load factor above 90 percent for more than four years. Vistara reported a growth in passenger load factor for the first time in nearly a year, while AirAsia India flew the least empty seats in three years.
Here’s how year-on-year passenger load factor of airlines fared in August…
- IndiGo’s passenger load factor increased 150 basis points to 84.3 percent.
- SpiceJet’s passenger load factor declined 120 basis points to 92.4 percent.
- Passenger load factor of AirAsia India rose 1,160 basis points to 87.8 percent.
- Vistara’s passenger load factor rose 30 basis points to 81.8 percent.
- Passenger load factor of GoAir increased 290 basis points to 87.5 percent.
- Air India’s passenger load factor dropped 140 basis points to 80.9 percent.
Still, a slow growth in air traffic and falling ticket prices won’t necessarily lead to a poor quarter for incumbent airlines. That’s because of declining fuel cost. Prices of jet fuel, which accounts for nearly a third of an airline’s cost, have dropped 9 percent over the last year so far in the ongoing second quarter.
IndiGo lost market share for the fourth straight month in August. Wadia Group-controlled GoAir managed to capture most of IndiGo’s lost market share, while SpiceJet’s pie remained flat compared to last month.
On Thursday, IndiGo shares rose 1.26 percent to Rs 1,698.30 apiece while SpiceJet’s fell 1.42 percent to Rs 125.05 apiece. Shares of Jet Airways, which is undergoing insolvency, closed 1.92 percent lower at Rs 35.25.