Budget airlines lead aviation industry revival in 2009
14 January 2010
With low-cost airlines leading, the aviation industry emerged from an almost two-year patch of bad weather in 2009, with a 7.8-per per cent growth in air traffic over the previous calendar year.
Statistics from the Directorate General of Civil Aviation showed that the number of passengers carried by domestic airlines in 2009 totalled 445.13 lakh, against 412.71 lakh in 2008.
In 2008, air traffic fell by 5 per cent, with 412 lakh domestic fliers against 433 lakh in 2007. While passenger traffic dipped in 2008, operating costs shot up due to higher oil prices, and fares slipped to very low levels on sagging demand and competition.
The revival in traffic dates only from July, as the first six months of 2009 consistently witnessed a double-digit percentage fall. December saw a whopping 33 per cent year-on-year increase, with 44.8 lakh domestic fliers against 33.7 lakh in December 2008.
Jet and Kingfisher are operating over 70 per cent of their fleet with budget airlines. The combined market share of IndiGo, SpiceJet, JetLite and Go Air was 38.5 per cent. This figure goes up to 55-60 per cent, after adding the combined share of Jet Konnect and Kingfisher Red, the budget brands of full service airlines.
Jet Airways and JetLite have the largest chunk of the market, managing over one-fourth of the passenger traffic in 2009. Jet and JetLite together accounted for 25.4 per cent of the market, closely followed by Kingfisher (the former market leader) with 23.9 per cent. Air India got 17.5 per cent, while no-frills carrier IndiGo had 13.9 per cent and SpiceJet 12.4 per cent of the market.
Airlines started increasing seats with effect from July onwards, as demand improved. Average airfares on most of routes have gone up, with demand once again exceeding supply. Besides seasonal demand, airlines saw significant jump in business travel during this period.
The industry considers higher jet fuel prices as one of the major concerns in coming months. Airlines are estimated to have lost Rs10,000 crore during 2008-09, largely on account of high fuel price and excess capacity.