Concluding holiday season impacts airlines’ topline

By Sreenivasa Rao Dasari  Published on  13 Sep 2019 5:46 PM GMT
Concluding holiday season impacts airlines’ topline

Hyderabad: With the holiday season coming to an end, the domestic air passenger traffic is easing off, according to the latest data. The concluding tourist season pushed the air passenger traffic grew a mere 1.6 per cent during the first quarter of 2019. Adding to this, the fall in aviation turbine fuel (ATF) couldn’t improve the bottom line of the airlines owing to subdued passenger traffic. However, the domestic airlines are focusing on international routes owing to high demand and increased capacity deployment.

The domestic air traffic rose 2.96 per cent in May. However, it was a major drop in numbers during April. It's estimated that 1.2 crore passengers travelled in May as against 1.18 crore in the previous corresponding period.

Similarly, international traffic travelled by India-based airlines also took a hit, observed Icra, a rating agency, in the report. The number of aircraft deployed on international routes by domestic airlines dropped 14.7 per cent in July. The international routes in the domestic airlines account for 32.1, and this was lower by 528 basis points (bps).

The closure of Jet Airways’ services impacted the domestic airlines in the number of seats. As a result, the industry capacity growth (ASKMs), which is measured in available seat kilometers, was subdued at 3.5 per cent.

Jet fuel prices fell 7.9 per cent. But the number of passengers has been decreasing. This sets off the advantage of the drop in oil prices. Despite this, the domestic airlines are keen on international routes to enhance their revenues, said Icra.

Among the domestic airlines, SpiceJet registered the highest passenger load factor at 93.9 per cent. Go Air with 93.3 per cent, IndiGo with 90.9 per cent settled at second and third positions.

On the other side, the cancellations of flights and delays are taking a toll on the domestic airlines. In May alone, the domestic airlines paid over Rs2.9 crore to more than 1.4 lakh passengers due to cancellations and delays and denial to boarding.

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