Mumbai: Higher airfares and the overall slowdown in the economy dampened demand for airlines this summer, data provided by the Director General of Civil Aviation show.
Domestic passenger traffic in the quarter ended June was up just 1% on-year.
“After a robust FY12 and a dismal FY13, domestic air traffic growth in 1Q14 grew by a modest 1%, despite it being a seasonally decent quarter for travel, coinciding with school breaks. Growth in international traffic carried by scheduled Indian carriers also remained quite weak, despite having a weak base in last year,” analysts Rajani Khetan and Mark Webb of HSBC global research wrote in a note.
The analysts believe a turnaround of the sector will be difficult if this trend continues. “With revenue drivers staying lacklustre and cost drivers negative, the outlook for the sector remains subdued. We believe that if the current trends persist, there is little likelihood of any substantial turnaround in the sector’s outlook.”
25/07/13 Yuga Chaudhari/Daily News & Analysis
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Domestic passenger traffic in the quarter ended June was up just 1% on-year.
“After a robust FY12 and a dismal FY13, domestic air traffic growth in 1Q14 grew by a modest 1%, despite it being a seasonally decent quarter for travel, coinciding with school breaks. Growth in international traffic carried by scheduled Indian carriers also remained quite weak, despite having a weak base in last year,” analysts Rajani Khetan and Mark Webb of HSBC global research wrote in a note.
The analysts believe a turnaround of the sector will be difficult if this trend continues. “With revenue drivers staying lacklustre and cost drivers negative, the outlook for the sector remains subdued. We believe that if the current trends persist, there is little likelihood of any substantial turnaround in the sector’s outlook.”
25/07/13 Yuga Chaudhari/Daily News & Analysis
