IndiGo cutting costs to maintain lead in domestic aviation market
20 May 2014
Low-cost carrier IndiGo, which maintained its lead in Indian aviation sector with over 30 per cent market share, is now looking at ways to bring down operational costs as new low-cost airlines enter the domestic market.
IndiGo, the only Indian carrier to report a profit, is now trying to bring down its biggest cost factor, jet fuel, as fresh competition opens up with new players like AirAsia India and Tata-Singapore Airlines (SIA) set to take the skies soon.
The low-cost carrier has started direct import of aviation turbine fuel (ATF) or jet fuel, mostly through southern ports, for fuelling some of its flights.
Direct import of ATF could lead to huge savings if an airline imports sizeable amount of its requirements, say experts.
IndiGo, however, did not give details like how much jet fuel it is importing and the extent of savings expected from it.
Indigo flew around 1.68 million passengers in April this year, while all Indian carriers together flew 5.32 million passengers during the month and about 5.29 million in the previous month.
IndiGo carried the maximum number of 1.68 million passengers, followed by Jet Airways-JetLite combine with 1.16 million, Air India (domestic) 9.74 lakh, SpiceJet 9.5 lakh, GoAir 5.07 lakh and Vijayawada-based new regional airline AirCosta 45,000, data available with the Directorate General of Civil Aviation (DGCA) showed.
AirCosta, which flies to nine destinations with four aircraft, led in the passenger load factor figures with 77.8 per cent, with IndiGo following it at 76.9 per cent, GoAir with 76.1 per cent, JetLite with 76 per cent and Air India and SpiceJet with 73.3 per cent each.
IndiGo had a market share of 31.6 per cent, followed by Jet Airways-JetLite combine with 21.8 per cent and Air India with 18.3 per cent, as per latest air traffic data.
SpiceJet was in the fourth place with a 17.9 per cent market share, GoAir had 9.5 per cent and AirCosta 0.8 per cent.
Total passengers ferried by all domestic airlines between January-April grew to 20.70 million from 20.30 million during the same period last year, recording a growth of little over 2 per cent.