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India air passenger traffic rises at fastest pace in nine months in October

India air passenger traffic rises at fastest pace

2017 11 22

2017 11 22

* Lower fares, festive season spur travel demand

 

MUMBAI -- Air passenger traffic in India grew at the fastest pace in nine months in October, as airlines cut fares to lure travelers during India's festival season.

The number of passengers flown last month jumped almost 21% on-year to 10.5 million, according to government data.

Air travel demand surged as an increasing number of people flew during Diwali, the most prominent Hindu festival, which fell in October this year. The festive period was also one marked by cutthroat fares as airlines lowered prices to lure flyers.

India's air travel has grown at an annual pace of more than 20% in the past few years as rising incomes and the advent of no-frills carriers prompted more people to shun trains for long-distance travel. A sharp fall in fuel prices also allowed airlines to drop fares.

Last year, India became the third-largest aviation market behind the U.S. and China with domestic traffic touching 100 million passengers.

The passenger load factor in October showed a rising trend, due to the "onset of tourist season," according to a statement from the Director General of Civil Aviation. Experts say the surge is also spurred by the government push to operate flights to airports that are under-served or unserved.

"Continuous capacity expansion by the airlines on popular routes, addition of new sectors, and slightly lower fares added to the growth momentum," said Sharat Dhall, chief operating officer at travel portal Yatra.com.

Dhall expects the peak tourist season during Christmas and New Year to further accelerate the passenger traffic.

In a bid to boost regional connectivity, India has unveiled a program to make it cheaper for people to fly within the country by subsidizing part of the cost for airlines to fly to smaller towns. Last week, InterGlobe Aviation, which owns India's largest airline by market share Indigo, said it took delivery of the first of the 50 ATR 72-600 aircraft to fly regional routes.

Between January and October, domestic airlines have carried about 95 million passengers, up more than 17% from a year earlier, the government data showed.

IndiGo filled more than 87% of its seats in October, compared with 85% in September, while state-owned Air India saw its so-called load factor fall to 77% from September's 79%. Jet Airways (India) saw its passenger load rise marginally to 81%.

Third-ranked Spicejet filled almost 94% of its seats, while the load factor at India's newest carriers Vistara fell to 80.2%. Budget airline AirAsia, saw its load factor expand to 83% from 82% in the previous month.

Shares of InterGlobe rose 1.1% and that of Spicejet gained 1.9%, while Jet Airways closed 4.4% higher. The benchmark S&P BSE Sensex gained 0.1%.

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