Indian domestic air traffic demand was highest globally in November: IATA

Indian domestic air traffic demand was highest globally in November: IATADomestic carriers flew 77.09 lakh passengers in December 2015, up 19.70% from 64.40 lakh passengers in December 2014. Picture: IndiGo aircraft.Reuters file

India’s domestic passenger air traffic demand in November 2015 grew 25.1%, the fastest in the world. The country was followed by the US at 9.1% and China at 8.4%.

Releasing the data, the International Air Transport Association (IATA) said Brazil, the Russian Federation and Japan witnessed a decline during the month.

The IATA also said global passenger traffic for November showed continued strong traffic growth above the 10-year average rate of 5.6%.

The industry body attributed the increase in demand to falling fares, evidenced by the fact that the first 10 months of calendar year 2015 showed a 5% decline in average fares in currency-adjusted terms.

“Consumers continue to benefit from lower fares, which are spurring demand. The economy benefits from the stimulus to consumer spending. And airlines are starting to achieve minimum acceptable profit levels. It’s good news all around, but as we open 2016, economic risks are mounting,” said Tony Tyler, IATA’s Director General and CEO, in a statement.

Overall, domestic travel demand rose 6.4% in November compared to November 2014 and and load factor improved 1.6 percentage points to 81.1%.

“India’s strong results reflect notable increases in service frequencies, ongoing economic strength and the timing of the Diwali holiday, which occurred in October in 2014,” the statement said.

According to DGCA statistics, domestic carriers in India flew 73.22 lakh passengers in November 2015, up 24.65% from 58.74 lakh in November 2014 and 70.39 lakh passengers in October.

IndiGo and GoAir lost market share in domestic air traffic in November 2015 as compared to October 2015, while national carrier Air India and budget airline SpiceJet gained.

IndiGo’s market share declined from 36.8% in October to 35.5% in November, while GoAir saw its share fall in a modest way, from 8.4% in October 2015 to 8.2% last month.

During the January-November 2015 period, domestic carriers flew 733.82 lakh passengers, an increase of 20.41% when compared to 609.43 lakh passengers in the corresponding period last year.

On the aviation industry’s profit margins last year and this year, Tony Tyler said: “The industry’s return on capital for 2015 and 2016 is expected to exceed its cost of capital — a very rare occurrence.”

But he warned that China and the ongoing crisis in global financial markets could upset calcuations in 2016. “Passenger demand remains strong; however, the ongoing turmoil in the global financial markets and concerns over slowing economic growth in China are casting a shadow over the New Year.”

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