ICRA maintains a stable outlook on the Indian aviation industry due to the rapid rebound in domestic passenger traffic during FY2023, which is anticipated to persist in FY2024. The sector has experienced enhanced pricing capabilities, resulting in improved yields and a positive revenue per available seat kilometer – cost per available seat kilometer (RASK-CASK) spread for airlines. This positive trend is expected to continue as the industry recovers pricing discipline, benefiting from consecutive declines in aviation turbine fuel (ATF) prices over the past five months and relatively stable foreign exchange rates.
Official data from the Directorate General of Civil Aviation (DGCA) released on Thursday reveals that domestic air passenger traffic in the country surged by 18.78% in June, reaching approximately 12.5 million compared to the same period last year. In June 2023, the estimated domestic air passenger traffic reached approximately 125.2 lakh, showing a slight decline of about 5% compared to May 2023’s 132.1 lakh. It experienced a year-on-year growth of around 19% compared to June 2022’s 105 lakh and was 4% higher than pre-Covid levels in June 2019, which stood at around 120 lakh.
IndiGo, Air India, Vistara, AirAsia India, and Akasa Air experienced an expansion in their market shares during June, benefiting from the grounding of budget carrier Go First. However, SpiceJet’s market share continued its decline, dropping to 4.4% last month from 7.3% recorded in January of this year.
Tata Group airlines, including Air India and AirAsia India (now rebranded as AIX Connect), witnessed strong passenger numbers in June. Air India carried 1.237 million passengers, while AirAsia India served 1.04 million passengers. Air India captured a market share of 9.7%, while AirAsia India held an 8% share. Vistara, a Tata-Singapore Airlines joint venture, recorded a market share of 8.1% with 1.011 million passengers. Akasa Air, launched in August last year, achieved a market share of 4.9% by flying 618,000 passengers. Meanwhile, SpiceJet carried 555,000 passengers, experiencing a market share decline to 4.4% and facing increased surveillance by the DGCA.
14/07/2023 Anindita Sen/Financial Express
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