Wednesday, November 23, 2016

Air India's share drops to this year's lowest in Oct, while domestic market grows over 20%

India may be the toast of the the world in terms of stupendous air traffic growth, which has remained above the 20% mark month on month throughout 2016 but our state-owned Air India continues to defy logic. The airline dropped to its lowest share of the domestic market this calendar year in October to just 13%. October was a busy month for air travel in India with both, Dussehra and Diwali festivals falling in the same month and total domestic air traffic growth continued to be a strong 23.18%.
Put simply, this means the government-owned airline lost market share when the overall market continued to expand. Also, one must remember that during the same month when Air India was losing share, market leader IndiGo scaled a new high of 42.6% of the market. The Jet Airways group and GoAir were the other two laggards, both also at their lowest market share points during October.
Air India's combined on-time performance at India's four busiest airports was at 71.8% in October, second from the bottom in the industry with only GoAir faring worse. The passenger load factor was also at 71.8%, ahead of only Vistara among national airlines. So about three in 10 flights were delayed across its network and the same proportion of seats on its flights was empty. From Mumbai airport - which has seen OTP of all airlines suffer due to severe congestion issues - Air India operated just 57% of its flights on time, the worst performance among all airlines. This means at least three in 10 flights were delayed from Mumbai airport.
With dwindling market share, falling financial performance and worsening operating performance during peak travel season, how will Air India achieve its stated objective of a 10-fold growth in operational profit this fiscal to over Rs 1,000 crore? A source said the main reason for the airline losing share in one of the busiest air travel months of the year was lack of aircraft availability. He said engineering issues, frequent ramp returns and some truancy by crew meant that more flights were delayed than in other months plus total traffic carried by the airline also suffered. An Air India spokesperson did not return calls for comment.
22/11/16 Sindhu Bhattacharya/F.Business