Peak season provides impetus to air passenger traffic growth in December 2016, says ICRA

Undeterred by demonetisation, the domestic air passenger traffic reported a robust YoY growth of 24 percent in December 2016. The growth was propelled by peak season demand along with prevalent low airfares due to intense competition. The traffic growth on international routes was however impacted slightly, with the industry reporting 7.7 percent YoY growth during the month.

Nevertheless, performance of Indian carriers on international routes was better than the industry, with 16.1 percent growth in traffic. Domestic passenger traffic growth was healthy at 22.9 percent during 9m FY2017.


The rate of capacity addition (measured in available seat kilometers - ASKMs) on domestic routes was healthy at 20.6 percent for 9m FY2017, driven by sizeable fleet expansion by the incumbents and scaling up of operations by new airlines. The same has been impelling the airlines to continue with competitive airfares, thus impacting the yields. Though the industry has been able to report healthy domestic passenger load factor (PLF) performance (88.7 percent in December 2016 and 83.9 percent in 9m FY2017) in the current fiscal, the same was inadequate to offset decline in yields.
09/02/17 Business Standard