GoAir outsmarts IndiGo, is surprise market gainer in November

GoAir, one of the smallest domestic airlines, was the surprise gainer in November as it filled up planes and managed to notch up market share, at the cost of market leader IndiGo. For the first time in seven months, IndiGo lost share when GoAir notched up 8.8% against 7.7% in October. IndiGo came down almost two percentage points to settle at 28.6% versus 30.2% in October. Except IndiGo, all other airlines managed to fill up more of their aircraft compared to October, some with the help of discounts and yet others by nimble marketing methods. November also saw IndiGo’s famed on-time performance slip.

[caption id=“attachment_614996” align=“alignleft” width=“380”]  Reuters[/caption]

In November, overall air traffic growth slowed with a month on month increase of just 2.33 percent against an almost 10 percent increase seen in October. A little over 5.58 crore passengers took to domestic skies this November against 5.34 crore in the same month last year.

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November saw all airlines except IndiGo improve their load factors - which measures the number of filled seats on a plane. IndiGo lost marginally to settle at 74.6 percent (74.8 percent) which means every fourth seat on its planes was empty. Air India saw the most dramatic increase in loads to 75.1 percent (70.7 percent) and managed to fill even more of its aircraft than IndiGo did in November. GoAir had a load factor of 73.2 percent in November, a vast improvement over 65.9 percent in the preceding month. This means GoAir was able to fill up almost three in four seats in November when it was flying with every third empty seat just a month before.

So what is IndiGo doing wrong and how is GoAir managing to attract more passengers? To a question on why IndiGo lost market share and load factor in November, President Aditya Ghosh said “because the other airlines are so much smarter than us”. He declined to elaborate further though industry watchers say some airlines are not offering middle seats in some rows and by this warped seat configuration manage to show improved load factors.

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IndiGo could have lost market share because of rapid capacity induction and addition of new destinations to its route map in November - it is tougher to fill new planes when the market is not expanding fast enough. The data released by aviation regulator DGCA shows that after healthy double digits growth between August and October this year, demand (as measured by revenue per kilometer) growth slowed considerably in November. It was up only 2.5 percent last month.

As for GoAir, industry watchers point to discounts on some routes and changes in seat configuration on its aircraft - two factors which helped increase load factors and therefore market share for the airline. It also offered discounts on select routes.

SpiceJet and Air India remained neck and neck, with market shares of 19 percent and 19.3 percent which means each cornered a fifth of the market. Air India managed to improve its October performance by holding on to fares. Instead, Chairman and MD Rohit Nandan says the airline concentrated on those routes which were loss making and tried to offer agents better commission to improve sales on these routes.

On the on-time performance parameter, IndiGo slipped from its own high standards in November even though it remained the most consistently on-time airline among its peers. So OTP in November was 86.5 percent for IndiGo against 92.1 percent the previous month and above 90 percent most months. AI was the least reliable on this parameter with at least one in four flights not flying on time.