No domestic air traffic growth this year despite airfare cuts

New Delhi, Aug 11: A significant lowering of airfares has not led to any growth in domestic air traffic in the first six months of this year compared to the same period last year, though the travel trade hopes of an improvement from the busy winter season starting October.

Air fares are almost 20 per cent lower this year than in 2012 and the trend is likely to continue this month too, but passenger traffic has remained at the same levels as January- June last year.

"There is no growth in the market, though the yields have gone up by six-seven per cent only due to lowering of capacity by the airlines by almost three per cent," Sharat Dhall, president of travel portal Yatra.com, told PTI here.

He said the fares, particularly for seven-day advance purchase, were "significantly low even during off-season. They have been drastically lower than last year and are expected to remain at this level in September too."

Full-service airlines like Jet Airways and Air India have already dropped fares to match those of low cost carriers, while Indigo and Spice have increased the same, he said, adding that a year-on-year comparison indicates a drop of 20 per cent in airfares since last year.

Noting that international travel has been affected by the depreciating rupee, Dhall said its impact would be seen in the leisure season, especially to western destinations in the US and Europe.

"Domestic destinations will be more attractive in the upcoming period." With the advent of start-up airline AirAsia India and the Jet-Etihad deal, the second half of the year would witness growth and competition.

Additional capacity would be added in the aviation market, which is likely to reflect in a positive growth in the next six months, he said.

PTI