Air India beats IndiGo on load factor in March, traffic falls

The month of March has been significant in domestic aviation business for two reasons. Not only has air travel demand picked up after 11 continuous months of decline last month, Air India has managed to surpass IndiGo in seat factor (which means number of occupied seats in an aircraft), also after many, many months.

The good news first. A slew of price cuts by airlines have perhaps stimulated the domestic market since month on month traffic grew by 1.58 percent to 51.81 lakh (51.08 lakh in February). But the overall decline continued since in the first quarter of this calendar year, traffic declined by almost 3 percent to 152.12 lakh (156.47 lakh). If the demand surge in March continues for the next few months, domestic aviation may just see growth returning. Seen by itself, the month on month growth in March is not much. But considering a month on month decline continuously since May 2012, it is a sure sign of some life returning to domestic aviation.[caption id=“attachment_728817” align=“alignleft” width=“380”] Good news for Air India. PTI[/caption]

Now lets come to Air India, which has been much in news for the last few days though not for its performance. According to data released by the DGCA, the airline reported the highest domestic load factor in March, even ahead of IndiGo which usually manages to fill more of its aircraft than any other airline. Air India filled almost 81 percent seats or 8 out of every 10 seats in March against IndiGo’s 79 percent. Perhaps a slew of discounted tickets that Air India has been selling for advance purchase and schemes like ‘jaldi jaldi’ have helped load factors like never before.

GoAir and Spicejet were at the third and fourth position respectively on seat factor with 77.1 percent and 76.1 percent this March. Jet Airways, which has just announced a life saver of a deal with Abu Dhabi’s Etihad Airways, managed to fill only 71.3 percent of its aircraft. This means Jet’s flights were not even three-fourths full during last month. But when we see month on month, every airline managed to fill a little less of their aircraft compared to February, with the exception of Air India.

In market share analysis, IndiGo remained the clear leader with 27.4 percent or more than a fourth of the market but Air India and SpiceJet came neck and neck with each carrying one in five domestic passengers at 20.4 percent and 20.2 percent respectively. Jet Airways together with JetLite was 23.8 percent but standalone it was only 17.7 percent which is much less than even a fifth of the market. GoAir was at 8.1 percent.

A word of caution for Air India: the airline is improving its performance but service standards are no better. The DGCA data shows Air India had to pay over Rs 80 lakh in compensation in March alone for delayed or cancelled flights and to passengers who were denied boarding. It also continued to have the maximum passenger complaints among all domestic airlines and the worst on-time performance at the country’s six largest airports.

So while passengers will flock to it because of lower or ultra competitive fares, lack of service assurance will again drive them away to LCCs unless Air India mends its ways.