Airlines in India carried an impressive 76.55 lakh passengers in the first month of 2016, a growth of 22.58% on Year on Year (YoY) basis. This growth continues to be driven by lower fuel prices making flying affordable and increased capacity in the market. The country saw 20% more domestic departures and 22% higher ASKMs on a YoY basis.
The market dynamics did not change much as anticipated with Spicejet continuing to lead the Load Factor charts, recording 92.1% load factor while Go Air was second with 84.9%. Vistara which completed first year of operations in January continued to record the lowest load factor. However, at 74.8% this was Vistara’s second best Load Factor ever. Jet Airways saw the maximum drop in Load Factor, losing 4.5% while IndiGo and Air India saw a marginal drop of less than one percentage.
Owning to sporadic fog this year, airlines also performed better on the On Time Performance (OTP) front with all airlines having better OTP than the previous year. Vistara recorded the highest OTP of 86.6%, while Air Asia India recorded the lowest at 56%. Among pan India carriers, Jet Airways and Air India were the highest and lowest respectively at 75.4% and 65%.
The market share game is going to get complex from here on as all airlines look to expand in the next few months to make the maximum of lower fuel and increasing traffic. IndiGo continued its market leadership with 35.6% of the market, even as it lost 0.8% over last January. The airline looks uncertain to achieve the 40% mark as predicted by some leading consultancies last year. This is so due to the changing dynamics, even as the airline carried 20% more passengers and had 19% more departures and Available Seat Kilometres (ASKM). Jet Airways was second with 21.4% market share and Air India was third with 16%. Both the airlines were lower by 2.7% over last January. Spicejet which came out of near death experience, saw an increase of 3.8% in market share owing to its stable operations as compared to what they were in 2015.
Air Asia India and Vistara hold 4.3% market share amongst them with the former having 2.3% while the later having 2%. Air Costa’s growth story has hit some air pockets, with the airline recording 26% lower departures in January. The airline still managed to have only 10% lower passengers and 15% lower ASKMs.
The battle between Full Service Carriers (FSCs) and Low Cost Carriers (LCCs) continues with 61% of all passengers flying LCCs and the rest 39% flying FSCs in January. LCCs amounted for only 53% departures but 62% ASKMs due to their seating configuration.
What to expect in February?
IndiGo has started additional flights without increase in fleet. These red eye flights will result in incremental ASKMs but may not immediately result in proportional increase in Load Factor. The airline along with few others re-instated some flights which were temporarily withdrawn due to anticipated fog. This increased capacity will translate into additional market share.
With Northern India witnessing fog in February this year, the OTP is likely to be affected for February. Major changes in the market share and increased competition will come to the fore in late March and beginning April, when most of the airlines have made changes to their schedule and added flights. As most operators have reached the upper ceiling of Category II-A ASKM deployment, there could be additional flights which could be announced in the next few weeks.
Summary to last year’s numbers