New Delhi: The fastest growing aviation market across the globe continues its struggle infrastructure and performance metrics of its airlines. Data released by DGCA show not a single airline managed to operate one in four flights on time from four of India’s busiest airports last month. This, when India’s airlines carried close to 10 crore passengers in 2016, with 12 consecutive months of above 20 percent growth. The delays have been increasing as traffic grows.
SpiceJet managed average on-time performance of just 70 percent across Bengaluru, Mumbai, Delhi and Hyderabad airports in December and this was the best on-time performance by any airline during December. As expected, Air India fared the worst with at least four in 10 flights getting delayed. And others fared only marginally better, getting almost every third flight from these airports delayed.
Traditionally, flying in and out of Mumbai has been the biggest bane for any airline due to massive congestion at this airport. Well, in December, Air India did not get even half its flights on time at this airport and even market leader IndiGo barely managed to get 50 percent of its flight on time here.
So when the government goes ga-ga over impressive traffic growth in the skies and talks of India becoming a global leader in aviation, it must consider developing a robust airport infrastructure too to keep pace with this kind of growth.
India’s aviation traffic almost doubled in the last six years. Airport capacity hasn’t. Infrastructure has failed to keep pace with traffic growth fueled by rising incomes and affordable fares.
This piece says the average time an aircraft spends circling before it can land in Mumbai during peak hours is about 45 minutes to an hour, versus 25 minutes for Singapore and zero for Qatar, according to Dubai-based Martin Consulting LLC. A proposal for a new airport in the outskirts of Mumbai has languished on the drawing board since 1997 even as Boeing Co. estimates Indian carriers need 1,740 aircraft over the next two decades.
Global aviation consultancy CAPA has said Indian airlines are together scheduled to induct 60-65 narrow bodies and 10-12 regional aircraft in FY2018. “The pace of aircraft inductions in FY2018 will be one of the key drivers of traffic growth,” it says.
Earlier this week, GoAir placed a firm order for 72 A320neo aircraft, doubling its firm order book for the aircraft type to 144. It now operates a fleet of twenty three aircraft. With the neo induction, Go Air will expand its network and offer fliers better connectivity. “The A320neo provides the latest technical innovations and unbeatable economics….This new order will further strengthen our network by adding more domestic and international routes in the years to come,” said MD & CEO, Wolfgang Prock-Schauer.
Market leader IndiGo already has 125 aircraft in its fleet and another about 400 on order, with staggered delivery schedules. SpiceJet has placed a fresh order for 100 aircraft at $22 billion with Boeing just this week.
As robust domestic air traffic growth pushes us ahead of Japan to become the third largest global aviation market, it is interesting to see how the major Indian airlines stack up. In December 2016, when the country witnessed the highest traffic growth ever in a single month, Air India had the lowest percentage growth in passengers while market leader IndiGo had the highest. Total traffic grew 23.4 percent year on year or by fourth to 0.95 crore in December, IndiGo’s passenger growth was over 40 percent whereas Air India’s was just short of 4 percent. SpiceJet and GoAir also managed double digit passenger growth at 24 percent and 22.1 percent respectively. The Jet Airways group was just a shade better than Air India with growth of 5.3 percent.
This essentially means the three low cost carriers IndiGo, SpiceJet and GoAir weaned away passengers from full service airlines Air India and the Jet Airways group. Also, analysis of data released by the DGCA shows IndiGo and Jet Airways together own about 60 percent of the market despite Jet having lost share during the last 24 months.
Analysts at brokerage Motilal Oswal have pointed out that domestic air passenger growth of 23.4 percent in December comes on the back of falling airline yields. “We believe this strong growth would be at the cost of yields, as seen in headline fares,” they said in a note to clients. Yields represent revenue per passenger and almost all airlines have been offering extended discounts on domestic fares to counter possible slowdown in revenues due to demonetisation.
Updated Date: Jan 18, 2017 13:19 PM