Indian aviation sees highest-ever domestic traffic in May: DGCA data

The peak summer holiday month saw demand soar, helped by last-minute travellers who had tickets booked with Go FIRST.

Data released by aviation regulator DGCA (Directorate General of Civil Aviation) shows that the industry closed the month of May with highest-ever domestic traffic in the history of India. With this, the dark days of the pandemic seem to be behind us.

May also saw IndiGo capturing its highest-ever market share of 61.4 percent, and  all the major airlines breaching the 90 percent load factor mark — the very month that Go FIRST suspended operations, missing out on what turned out to be a bumper month for the industry.

Strangely, every major airline gained market share on the back of Go FIRST’s suspension, except SpiceJet, which further lost market share by 0.4 percent. SpiceJet’s market share now stands at 5.4 percent, while Akasa Air, which is less than a year old, cornered 4.8 percent market share in May.

The routes which minted money

The peak summer holiday month saw demand soar, helped by last-minute travellers who had tickets booked with Go FIRST.

On the Delhi-Leh-Delhi sector where Go FIRST had a sizeable presence, Air India sold 8.23 percent of the total seats in the highest fare bracket, earning 20.95 percent of revenue in the sector  from the highest fare bracket.

Nearly 25 percent of the seats sold by Indigo belonged to the highest bracket, earning over 30 percent of the revenue from the sector. Vistara, too, managed to sell 14 percent of its inventory in the most expensive bracket, clocking 31 percent of its  revenues on this route.

Another route in which Go FIRST had a sizable presence was Delhi-Srinagar-Delhi, where Air India sold 4 percent of its seats in the highest bracket, earning 9.5 percent of its revenues on this route. Vistara sold 4 percent of its inventory and earned 11 percent of its revenues in this sector from the highest fare bracket.

IndiGo sold 10 percent of its seats in the highest bracket on the Mumbai–Srinagar route, 4 percent on the Bengaluru-Delhi route, and 3.4 percent on the Delhi–Chennai run, clocking 8.8 percent, 8.7 percent, and 6.2 percent of its revenues, respectively, on these sectors. Indeed, IndiGo has leveraged its strong position and made the most of the closure of Go FIRST.

Ironically, with its limited operations in the first week of May, Go FIRST sold 11 percent of the seats on the Chennai-Port Blair and Delhi-Patna routes in the highest fare bracket. The airline garnered 24.5 percent and 23.2 percent of its revenues in these sectors from this fare bracket.

Broadly, across the sectors mentioned, the highest fare ranges between 13,000-19,000.

The DGCA releases the data for a select set of routes and not the entire market, which has over 900 unique city pairs. Air fares had also shot up on the Pune-Delhi, Mumbai-Goa, and Delhi-Goa routes in the wake of Go FIRST suspending operations.

Sunny days ahead

April to June 2023 is turning out to be the best-ever quarter for Indian aviation in terms of domestic passengers. Coupled with cooling oil prices and a stable Rupee,  this  should translate into bumper profitability as well.

This bodes well for IndiGo, which is targeting 100 mn passengers this year while grappling headwinds due to grounded planes because of  engine issues.

This also bodes well for the Tata group of airlines, as they could turn cash positive earlier than planned. Even newbies like Akasa Air could hope to benefit from an expanding industry.

Losing market share in the best-ever month in the history of Indian aviation can be fatal, but SpiceJet has committed to getting more planes in the air, and the demise of Go FIRST, were it to come to pass, could throw it a lifeline