Tuesday, December 20, 2016

India air traffic jumps in November as fares drop amid cash crunch

Mumbai: India's domestic air traffic surged in November, keeping pace with the gains in previous months, as carriers cut fares to lure passengers amid fears of a slowdown after New Delhi abruptly banned high-denomination currency notes stirring a cash shortage.

The number of passengers flown in November grew 22.45% to 8.97 million from 7.32 million a year earlier, according to government data.

On Nov. 8, India banned notes of 500- and 1,000-rupee denominations that accounted for 86% of the currency in circulation in a bid to crack down on corruption and unaccounted wealth. The ensuing cash shortage resulted in a drop in demand across sectors such as consumer goods and real estate, triggering fears of a growth slowdown in aviation sector as well.
India's domestic air traffic has been booming as rising incomes and the advent of no-frills airlines over the last decade prompted more people to shun trains for long-distance travel. According to data from the International Air Transport Association, air travel in the country grew about 19% last year, compared with a 9.7% increase in China and a 5.4% growth in the U.S.

"Allaying all growth fears, domestic passenger traffic has again clocked record growth of 22.4% year-on-year in the de-monetization month of November," Civil Aviation Minister Ashok Gajapathi Raju wrote in a Twitter message on Thursday.
20/12/16 Nikkei Asian Review
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