Air traffic drops for the first time in four years

New Delhi: For the first time in four years, air traffic growth dropped in June, mainly because of rising fares dampening travel plans. Matter may get worse, according to industry sources, with the decline set to get steeper.

According to data released by the Directorate General of Civil Aviation (DGCA), domestic airline passenger numbers declined 3.8 per cent to 3.5 million in June 2007, from 3.64 million a year ago. June has traditionally been a strong month for the aviation business.

Airline sources are not surprised by the decline and expect the numbers for July 2008 will be worse,probably in the range of 11-12 per cent.

In the first half of 2008, the number of passengers flown went up by a modest 7.5 per cent year-on-year, with domestic airlines ferrying a cumulative 22.7 million passengers as compared with 21.12 million in the first half of 2007.

Cyclically, the July-September quarter has been a lean period for domestic aviation, coming just after the summer vacation traffic of June. In May 2008, India's airlines flew a total of 4.11 million passengers, 6.8 per cent more than the 3.85 million a year ago.

Aviation turbine fuel prices, which have virtually doubled over the past year, have driven airlines to pass a fair quantum of the hike onto passengers through fuel surcharges, some of which increased to as much as Rs2,900 per ticket in June. A year ago, they were at Rs900.

Airlines have been accumulating losses and shelving expansion plans because of rising costs, and the domestic aviation industry is estimated to post a combined loss of about $2 billion (Rs8,540 crore) this fiscal.

SpiceJet announced capacity reductions by almost 20 per cent earlier this month, reducing its number of daily flights to around 94 from the previous 117, while discontinuing loss making short-haul routes.