Monday, June 26, 2017

Domestic airlines eye bigger share of foreign traffic

Unlike many countries, international air traffic to and from India continues to be dominated by foreign airlines, primarily from West Asia. But Indian carriers have been growing their share of the pie steadily.

From about 30 per cent in FY14, the share of domestic airlines in India’s international traffic rose to 34 per cent in FY16 and further to 35 per cent in FY17, says a report by rating agency ICRA. This is a result of Indian carriers outperforming their international counterparts in traffic growth.

For instance, in FY17, while overall traffic growth to and from India was 8.4 per cent, the domestic carriers grew their international traffic at a faster 11.8 per cent.

While this is much slower than the about 22 per cent growth in domestic air traffic in FY17, the foreign traffic opportunity is also getting much attention from Indian carriers. More flights by both established players (Air India and Jet Airways) and relatively new entrants (IndiGo Airlines and SpiceJet) have aided the trend of growing market share on foreign routes.

The Jet Airways and Air India groups have, over the years, built up significant share on the international routes (13.5-15.5 per cent), while IndiGo and SpiceJet are gradually building up their presence (about 3 per cent share each).
25/06/17 Anand Kalyanaraman/Business Line