Budget airlines continued to cut into the market share of their full-service rivals in January, even as domestic air passenger traffic grew near- ly 21% over a year earlier.
A total 4.93 million passengers travelled by air in India last month, compared with 4.08 million in January 2010, according to data released on Monday by the Directorate General of Civil Aviation (DGCA).Airlines flew a record 52.02 million passengers in 2010, up 18.6% over 2009.
Low-fare carriers such as SpiceJet Ltd, IndiGo--run by InterGlobe Aviation Pvt. Ltd, and GoAir--run by Wadia Group-owned GoAirlines (In- dia) Pvt. Ltd--expanded their market share at the expense of full-service airlines like Air India Ltd, Jet Airways (India) Ltd and Kingfisher Airlines Ltd. Jet Airways, along with its low-cost subsidiary JetLite, saw its market share slip to 24.8% in January from 25.2% a year earlier.
Kingfisher's market share came down to 19.5% from 22.2%, and flag carrier Air India's to 15.8% from 18%.
IndiGo expanded its market share to 19.2% from 15.3%, GoAir to 6.4% from 5.4% and SpiceJet to 14.3% from 12.2%.
“That trend will continue”, said Neil Mills, chief executive of SpiceJet.
But he said rising fuel prices, which account for 30-40% of airline costs in India, and civil unrest in parts of oil-rich West Asia and North Africa are a worry.
“It makes profitability a little harder”, Mills said.
DGCA said it received 1,296 passenger-related complaints against airlines in January.
The average number of com- plaints per 10,000 passengers carried for the month was 2.7.
The highest number of complaints were against JetLite, while state-owned Air India faced the least number of com- plaints.
JetLite could not be contacted immediately for a response. A text message sent to a company spokesperson on Monday evening remained unanswered.
Overall, on-time performance of airlines for the month was 81.2%.
January is considered a good month for domestic travel, and airlines enjoyed occupancy rates of 69.3-88.6%.
But despite the growth in passenger traffic, an official at a domestic airline warned yields, or revenue per ticket, may fall 25% in the current quarter. “We are seeing profitless growth again”, said the official, who did not want to be named.
“You can fill up the plane any time. Air Deccan also used to carry 80% load factors in 2007.
But eventually what hap- pened? Certainly, it won't be that bad though”.
“You can fill up the plane any time. Air Deccan also used to carry 80% load factors in 2007.
But eventually what hap- pened? Certainly, it won't be that bad though”.
Low-cost carrier Air Deccan was sold to Kingfisher and is now run as Kingfisher Red.
Airline stocks slumped on the Bombay Stock Exchange on Monday even as the bench- mark index, the Sensex, closed 1.25% up at 18,438.31 points.
SpiceJet's shares were down 1.37% to close at `46.65 a share, Kingfisher was down 4.95% at `41.25 a share, and Jet slumped 4.64% to end at `472.50 a share.