Airline traffic data: Better than 2020 but far from pre-COVID levels

Representational image.

The year 2021 saw 838.14 lakh passengers fly on domestic routes in India, showed data released by regulator Director General of Civil Aviation (DGCA). While this is a jump of 33.1% over 2020, it still pales in front of 2019 when traffic stood at 1441.71 lakh passengers!

Going by the waves of pandemic and the restrictions around it, this could well be the new normal that airlines are looking at for the next few quarters at least if not the next few years.

While 2020 was about the lockdown, 2021 was all about living with the pandemic as the country saw a deadly second wave when businesses almost came to a standstill as cases and deaths both mounted to their peak in May and June, only to come back quickly and reach record highs in November and December.

How has the year been?

If there was a silver lining in 2021, it was the fact that the air services continued uninterrupted unlike in 2020 when for two months the entire country had come to a halt! However, profitability has been elusive and will most probably be so going forward. While the results of Q3FY22 are awaited, the three quarters adjusted to the Calendar year 2021 have seen IndiGo report a loss of Rs 5,756 crore and it would be a miracle if they report any profits for the Oct-Dec quarter!

DGCA extends the suspension of international commercial passenger airlines to and from the country till February 28

The year was full of peaks and troughs - unlike a steady growth in the past and in this case, the peaks and troughs were linked to the typical seasonality but linked to the COVID cases in the country. A mix of fare caps, capacity caps, and different regulations at the state and city levels has made aviation even more complex than it already was!

Market Share

If there is one thing that does not require any predictability, it is the market share in Indian domestic aviation. IndiGo - India’s largest airline by fleet, continued to rule on the market share front. The airline continued with its market share leadership cornering 54.8% in 2021. However, the number two position was up for grabs in 2021 and SpiceJet lost the position to Air India! This was on the back of SpiceJet cutting back on flights in the Winter schedule and operating a skeletal schedule during the second wave.

There were two major changes this year. The first being SpiceJet was dethroned from its second position, which is now occupied by Air India. This was largely due to SpiceJet shrinking in both summer and winter schedules. The other change was Vistara - a TATA-Singapore Airlines joint venture surpassing the market share of sister concern AirAsia India - which is likely to see 100% ownership by TATA from the existing 83.67% by March 2022.

Large LCC Market

The low-cost carriers (LCC) ruled the roost for another year as the year closed with a combined market share of 80.7% for low-cost carriers. This is slightly lower than last year as Air India and Vistara clawed back with some market share. In 2020, FSCs had a market share of 17.1% while in 2019 it stood at 20.6%. In 2018, the market share was 32% for Air India, Jet Airways and Air Vistara combined. This is also due to the fact that SpiceJet has shrunk leading to lower passengers with LCCs to an extent.

Gains and Losses

While the market grew by 33.1% over 2020, there were mostly winners with only one loser. SpiceJet was the only airline that carried fewer passengers than 2020, as it shrunk its passenger numbers by 6.05%.

Vistara has been the biggest gainer as it carried over 55% more passengers than it did in 2020. This was followed by Air India - which carried 47% more passengers with market leader IndiGo coming in third with 41% more passengers than 2020.

Tail Note

But the hope of December 2021 is being overshadowed by the gloom of January 2022 when traffic is down over 30% already. The industry is getting adjusted to the new traffic cycles, which are more linked to covid cases and waves and not the traditional peaks linked to holiday times and seasons.