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In Jet Airways' absence, Air India does its best in 5 years. But guess who gained the most?

The national carrier managed to arrest a slide in its market share, but it was IndiGo that grew its pie the most.

February 11, 2020 / 04:12 PM IST

Collapse of Jet Airways did a world of good to its peers, including struggling national carrier Air India. The biggest beneficiary though was IndiGo (InterGlobe Aviation), which expanded aggressively to make the most of the absence of Jet Airways, to further extend its dominance in the domestic aviation sector.

Jet Airways had closed operations in April last year after it ran out of money. Though an insolvency process is on to get a new owner, it increasingly looks like an insurmountable climb. Much of its aircraft, airport slots and flying rights have been distributed to peers.

Data released by industry regulator DGCA, showed that for the first time since 2014 -- till when the numbers are available -- Air India has managed to arrest a slide in its market share. The national carrier ended 2019 with a share of 12.7 percent, same as the year earlier.

On the other hand since 2014, when its market share was 18.4 percent, Air India has kept losing out to its private peers each year. Its market share graph is a constant slide -- 16.4 percent in 2015, 14.6 percent in 2016, and 13.3 percent in 2017.

Overall, the Indian aviation sector saw its growth slumping to just 3.7 percent in 2019 as compared to 18.6 percent in 2018. The downslide was reflective in the subdued numbers in December, otherwise a peak season for holiday travel.

Air passenger traffic in India increased by 2.56 percent in December, but fell from 11.18 percent growth in November.

Down and out?

Jet Airways had ended 2018 with a 13.8 percent share of the Indian aviation pie. But by then its fortunes had started to change. Defaults in payments had led to disruption in operations, and the airline had failed to pay salaries to all its employees.

In the first three months of 2019, the Naresh Goyal-founded airline saw its numbers falling drastically, ending the March quarter with a share of 8.9 percent. That dropped to 0.8 percent in April, when Jet Airways last operated a flight.

Overall, it ended the year with a market share of 2.3 percent.

The biggest gainer

Each of Jet Airways’ private peers -- IndiGo, GoAir, SpiceJet, Vistara and AirAsia -- benefited from its absence.

GoAir’s market share grew to 10.6 percent in 2019 from 9 percent year-on-year. SpiceJet’s share too increased to 14.9 percent a year later from 12.3 percent in 2018.

The biggest gainer was IndiGo. Despite the face-off between its co-promoters and disruptions because of shortage of pilots and engine troubles, the country’s largest airline managed to increase its market share, the most.

The Gurugram-based airline had a market share of 41.5 percent at the end of 2018. This ballooned to 47.1 percent in December 2019.

Though its capacity addition was impacted by the engine trouble, IndiGo managed to expand its fleet much faster than others. It will still end the financial year with a capacity addition of 22-23 percent, slower than the 30 percent YoY, yet faster than most of its peers.
Prince Mathews Thomas heads the corporate bureau of Moneycontrol. He has been covering the business world for 16 years, having worked in The Hindu Business Line, Forbes India, Dow Jones Newswires, The Economic Times, Business Standard and The Week. A Chevening scholar, Prince has also authored The Consolidators, a book on second generation entrepreneurs.
first published: Jan 21, 2020 11:08 am