Dreamliner: Demand, supply finally meet in air

Bangalore: This is the stuff every airline in the world dreams of.
On Friday, Air India had desperate passengers requesting the state-owned carrier to accommodate them on any of its flights so that they could fly out in time to enjoy a long weekend -- on account of Diwali -- with their friends and families.
But Jitendra Bhargava, executive director -- corporate communications -- Air India, said there just wasn't enough seats available to take them all onboard.
A senior executive of a budget airline also said that most flights on the metro routes were operating at 100% load factors since last one week -- that too at healthy yields --revenue realisation per seat.
This is in stark contrast to the situation last year, when airlines were barely able to fill up half of their planes because recession had pulled down demand for air travel and soaring aviation turbine fuel (ATF) prices had pushed up fares beyond the affordability levels of most fliers. Then, there was also the perennial problem of overcapacity, which has for long spurred fare war in the domestic airline industry and kept the load factors of carriers low.
In the third quarter -- October to December -- of this fiscal, experts say that demand-supply scenario seems to be reversing. They feel there may be little or no supply overhang in the market in the December quarter as many airlines have aggressively trimmed fleet sizes and cut frequencies on several routes in the last one year.
Experts say it is this industry capacity snip, more than anything else, that caused the mad rush kind of situation for Air India on Friday.
Ankur Bhatia, managing director of Amadeus, said airlines were recording better load factors because the wide chasm between demand and supply was closing as a lot excess capacity had flown out of the market in the last one year.
17/10/09 Praveena Sharma/Daily News & Analysis

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Categories: Indian Aviation- In General Oct 2009