Slowdown Casts Shadow On Festive Air Travel Demand

The long spell of economic slowdown has hit the airline sector with air travel demand remaining tepid even in the ongoing festive season.

Air passengers are likely to shell out the highest fares for domestic travel this fiscal with the ticket prices expected to spike 7-9 per cent during the period because of limited capacity additions since the grounding of Jet Airways, rating agency Crisil Research said on Wednesday.

New Delhi: The long spell of economic slowdown has hit the airline sector with air travel demand remaining tepid even in the ongoing festive season. Official data shows the number of passengers carried by domestic airlines have been on downward path month after month despite attractive deals by the carriers across its network. Aviation experts blamed low business activity, muted consumer sentiment and closure of Jet Airways as main reasons for the lower number of passengers flying. They pointed out that despite the peak winter season, ticket prices have not gone up much and airlines are coming out with flash sales. Low-cost airline GoAir last week announced a pre-Diwali 24-hour super saver deal offering tickets for as low as Rs 1,296 onwards (inclusive of taxes) for various routes across its network. "The demand is certainly low this festive season but airlines have been able to hold on to fares because Jet Airways' exit from the market has left the other airlines with enough people to fill in. Right now, sentiments are quite down. People are not buying cars, clothes etc and cutting down their discretionary spending," said Rajan Mehra, CEO of Club One Air and former India head of Qatar Airways. "Because of Jet's downfall, the current players have not been affected so much," Mehra added. As per Directorate General of Civil Aviation (DGCA) data, the total passengers carried by all domestic carriers together was 115.33 lakh in September this year, significantly down from the peak of 121.87 lakh in May. During the May-September period, the graph shows continuous decline. Flight occupancy was also lower in the month of September, 2019. "The passenger load factor in the month of September, 2019 has shown declining trend compared to previous month primarily due to the end of tourist season," the DGCA said. It may, however, be noted that air passenger growth in the last five months has not been negative when computed on year-on-year basis. It has been in low single digit with the September growth being 1.18 per cent when compared with the same period last year. "Passengers carried by domestic airlines during January-September 2019 were 1,058.91 lakhs as against 1,027.93 lakhs during the corresponding period of the previous year thereby registering annual growth of 3.01 per cent and monthly growth of 1.18 per cent," the aviation regulator said in its monthly air traffic report. Ankur Bhatia, Executive Director of diversified travel and hospitality player Bird Group, said that air travel demand has not been very strong this festive season and most of the major routes have not seen much increase in airfares. "Barring few sectors, tickets are available at a reasonable price. The demand this festive season is not strong primarily because of economic slowdown," he said. Bhatia partly blamed excess capacity in the market for lower airfares during the peak flying season.