Domestic air traffic growth slows on Maharashtra Covid-19 test caveat

Airline passengers from Delhi, Goa, Gujarat and Rajasthan are required to take a RT-PCR test to be able to travel to Maharashtra
Domestic air traffic growth slowed down to 21 per cent on a sequential basis in November after growing by 30-40 per cent  in the three previous months.

Domestic airlines flew 6.3 million passengers in November compared to 5.2 million a month earlier. Last November, airlines had carried 12.9 million passengers.

Apart from a higher base, the other possible reasons for a slower growth include one additional day in October (compared to November). The mandatory RT-PCR tests in Maharashtra, introduced during the last week of November, also proved to be a dampener.

Airline passengers from Delhi, Goa, Gujarat and Rajasthan are required to take a RT-PCR test to be able to travel to Maharashtra.

Seat occupancy of all airlines, however, grew to over 70 per cent for most airlines as capacity growth was slower than demand.

Domestic flight operations resumed on May 25, though with caps on capacity and fares, after two months of lockdown. The government permitted airlines to operate 70 per cent of their capacity last month and this was increased to 80 per cent in December. However, most airlines, barring IndiGo, are still operating at lower than 70 per cent of their pre-Covid capacity.

“The number of flights grew by 10.6 per cent in November over the previous month. The lower growth in flights and higher passenger growth led to an increase in load factors. This bodes well for airlines since there is a restriction on selling seats at median airfare. When load factors go up, airlines have the scope to better manage their revenue,” said Ameya Joshi, aviation expert and founder of blogging site Network Thoughts.

A senior executive of a private airline pointed out that airlines are registering growth despite constraints such as restrictions on number of flights in Mumbai and Kolkata. “When services resumed in May, the occupancy was less than 60 per cent and now it has  increased to over 70 per cent for most airlines in November,” he said. The load factors also got a boost last month as people returned to native places or travelled for leisure during the Diwali break.

SpiceJet reported the highest load factor of 77.7 per cent in November, followed by IndiGo which registered 74 per cent occupancy.

IndiGo topped market share as well as the punctuality parameter. But its market share declined to 53.9 per cent in November from 55.5 per cent a month earlier as other airlines started adding flights.

“The traffic numbers are encouraging. We expect this trend to hold and improve further with the expected launch of the Covid-19 vaccine,” Director General of Civil Aviation Arun Kumar said.

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