UP & UP 🛩️

Do latest air traffic numbers suggest the worst is over for Indian aviation?

Happy journey!
Happy journey!
Image: REUTERS/Danish Siddiqui
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India’s aviation sector is finally showing some green shoots of recovery.

Domestic air-traffic growth in November rebounded to double-digit levels for the first time since December 2018, showed data released by the sector regulator directorate general of civil aviation (DGCA) yesterday (Dec. 12).

India’s airlines ferried up to 12.9 million passengers last month, compared to 11.6 million in November 2018, up 11.2%. The growth was mostly led by SpiceJet.

Experts, however, believe November was nothing to write home about. “An 11% growth is not really that great. Demand increased in the festive season, especially from October,” Mark Martin, founder and CEO at Martin Consulting, told Quartz. Last year, the industry had consistently clocked double-digit growth in the festive months of September (18.95%), October (13.34%), and November (11.03%).

“Nevertheless, the latest upward trend is certainly a positive sign,” Martin said.

A year to forget

Since the beginning of 2019, Indian aviation has faced an overall slowdown. Matters aggravated in April when the financially embattled Jet Airways folded up. That month, passenger traffic contracted as airfares rose and capacity fell.

For the first seven months of 2019, growth was just 3.15%, compared to 21.8% last year, data showed.

“A weak consumer sentiment, fall in capacity after the grounding of Jet Airways, and high airfares contributed to the subdued air passenger traffic,” Martin said.

The way forward

Now, capacity and airfares have begun to normalise.

“Ticket prices have come down considerably, especially on the key routes, the capacity problem, too, has also been dealt with for the moment, so the expectation remains that the growth will continue for the next four-to-five months,” said Ashish Nainan, an analyst at the rating agency CARE.

Quartz had earlier reported how airfares for domestic travel in November and December are witnessing a decline, as airlines induct more aircraft.

This trend is expected to continue. There are now 628 aircraft being flown by Indian carriers, compared to 529 in April when Jet Airways shut, The Hindu newspaper reported on Dec. 12.