The days of revenge travel and pent-up demand driving air traffic in India seem to be over. Data from Indian civil aviation regulator Directorate General of Civil Aviation (DGCA) suggests that the festive months are seeing a slowdown in air travel growth, which experts attribute primarily to higher fares. Data from travel portals suggests that airfares are up by 30-40% from the levels in December 2022.
“On the face of it, it does look like the days of revenge travel are over. What is more concerning is that even in a good quarter, when the capacity has inched towards normal, the demand hasn’t, which can be blamed on high prices,” said Ameya Joshi, founder of aviation consultancy firm Network Thoughts.
Revenge travel exploded in the period between December 2022 and May 2023, when air traffic each month grew an average 8% compared to corresponding months in 2019. May 2023 saw a record 13.2 million passengers taking flight.
Since then, though, those numbers have not been breached, not even during the usually heavy travel occasions of Dussehra and Diwali. The new record for daily traffic, 456,748 passengers (previous best: 456,082 passengers on 30 April), was registered on Saturday, 18 November, with people making a beeline for Ahmedabad for the next day’s cricket World Cup final, a single-day event. Comparatively, the two days prior to Diwali (which was on 12 November), a pan-India festival, saw just 413,953 and 394,289 passengers, respectively. This month, so far, the average daily air traffic is over 402,000 passengers, compared to 431,000 in November 2019.
DGCA data shows that passenger load factor (PLF, or seats occupied per flight) has declined for at least four major airlines. Let’s take IndiGo, the largest, as a proxy. The market leader’s PLF was lower in October 2023 at 83.3% than in September (84.7%), despite the onset of festivals such as Dussehra. That is contrary to recent trends. For three successive years—2020, 2021 and 2022—IndiGo’s PLF increased from September to October—81.4% to 82.1%, 73.6% to 78%, and 65.4% to 68.2%, respectively.
The primary bugbear this time round: rising airfares. A big part of this is because Go First, which used to fly about 7% of the domestic market, suspended operations in May.
Industry experts also point to factors such as continuing work-from-home policies at several organizations and an inflationary environment as being behind the muted demand growth.
“Although several factors including rising airfares, lower capacity deployment, closure of Go First, IndiGo fleet reduction and an overall lower capacity deployment appear to be the cause of this, costs need to be kept in control and airlines must immediately push towards quicker and faster capacity deployment, thereby lowering the net cost per seat,” said Mark Martin, founder and chief executive officer of Martin Consulting.
The good news is that for the January-October period, overall air travel growth has been 6.2% higher than the pre-covid level of 2019 at 125.5 million passengers. But that is scant consolation considering the slowdown during the festive months. “Going by the current traffic trends, it seems difficult that the whole period will see record traffic. It will be more of a one-two day phenomenon,” Joshi added.
Global supply chain issues have also hampered the availability of spare parts and engines, resulting in constraints in deployment of flights. These factors, in addition to the grounding of Go First, have resulted in more than 100 aircraft being cut out of available capacity in India, which has contributed to higher fares.
“Effective induction of aircraft including those that are taking place by Akasa Air and Air India isn’t as rapid as we’d like to believe. It must be noted that flight cancellations have been marginally higher for the last six months, including flight delays. Travellers clearly are discerning and fully aware of current challenges. Increased multimodal infrastructure also has supported with balancing out air traffic demand,” Martin added.
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