Domestic airlines experience muted air traffic growth during 2019 holiday season

FE Bureau
air traffic, domestic airlines

The holiday season did not bring much cheer to the Indian aviation sector. Domestic air traffic in December 2019 grew modestly by 2.7% year-on-year to 1.3 lakh passengers, compared with 11.2% growth in November.
In a month that typically sees increased air travel, capacity utilisation remained muted among major domestic airlines in December. The average passenger load factor of major Indian airlines stood at 84.45% in December 2019, compared with 86.8% a year ago. For the full year, domestic traffic grew just 3.7% annually in 2019.

The passenger load factor of IndiGo, India's largest airline by market share, stood at 90.4%, 130 basis points (bps) lower than November. IndiGo’s load factor was only 150 bps higher than a year ago, despite a slow down in aircraft addition following the Directorate General of Civil Aviation’s clampdown on Airbus A320neos. The passenger load factor of SpiceJet remained flat on a monthly basis at 92.7% in December. Meanwhile, Vistara's load factor fell 300 basis points from November and stood at 81.1% in December. GoAir also saw a 300 bps decline in load factor to 89.7% in December. India's flag carrier Air India's load factor fell 220 bps from the previous month to 80.8% in December. AirAsia's load factor stood at 84.3% in December.

For the full year, domestic airlines carried 14.4 crore passengers, an increase of 3.7% year-on-year. In comparison, air traffic grew 18.9% between January and December 2018. The air traffic data is "a bit disappointing," a senior government official said. "In 2019, we faced headwinds on account of Jet Airways. But 2020 is going to be different, and the double-digit growth should be back sooner rather than later," the official added.
Domestic air traffic took a hit after Jet Airways was grounded in April 2019, dropping to single-digit growth in May 2019 for the first time since December 2014. Airlines have also been impacted by the grounding of Boeing 737 MAX aircraft and issues with Airbus A320neos.

Total passengers carried by IndiGo in 2019 were 6.79 crore compared with 5.76 crore in 2018. Meanwhile, SpiceJet carried 2.15 crore passengers last year, up 25% from 2018. IndiGo retained top market share at 47.1%, while SpiceJet held 14.9% and Air India held 12.7% of the domestic market.