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HomeNewsAviationDomestic pax traffic shows de-growth of 4.2% in April 2019 after 6...

Domestic pax traffic shows de-growth of 4.2% in April 2019 after 6 years: ICRA

After six years of monthly Y-o-Y growth, the domestic passenger traffic has witnessed the first Y-o-Y de-growth of 4.2% to 109.95 lakhs in April 2019. The last monthly Y-o-Y de-growth in the domestic passenger traffic was witnessed in June 2013. As per ICRA note, this is primarily attributable due to adverse impact on the industry capacity which has been hit hard due to grounding of aircraft of Jet Airways (India) Limited, starting February 2019 (due to liquidity constraints) and eventual discontinuation of its operations with effect from April 18, 2019. The consequent increase in airfares due to the demand-supply imbalance has impacted the industry passenger load factors (PLFs). During April 2019, all airlines, except GoAir, have reported a Y-o-Y decline in PLFs. Overall, the domestic passenger traffic growth for January 2019 to April 2019 has been a muted 2.5 per cent, significantly lower than the 24.6 per cent growth witnessed during January 2018 to April 2018 period.

Elaborating further, Kinjal Shah, Vice President and Co-Head, Corporate Sector Ratings, ICRA, says, “The discontinuation of operations by Jet Airways has impacted ~14% of the total industry capacity. Overall, the moderation in capacity starting February 2019 has resulted in increased airfares – ~30-40% increase over September 2018 to March 2019 – and more inconvenience to the passengers. India, being a high price sensitive market, it has affected the passenger traffic growth from October 2018 onwards. While there has been redeployment of some of the aircraft of Jet Airways by the other airlines and thus some moderation in the airfares during April 2019 and May 2019, overall they continue to be high.”

“While the increased air fares are likely to support the profitability of the airlines in an environment of high costs, the impact on the passenger growth does not bode well for the industry,” concludes Shah.

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