Wednesday, December 22, 2010

India Experiences Supply Deficit In Airline Seats

Aviation Daily Dec 22 , 2010 , p. 12
Neelam Mathews

India is suffering from a shortage of capacity as traffic from January through November rose by 19% over the same period last year.

Domestic passengers carried by scheduled airlines in November 2010 was 4.8 million, compared with 4.6 million the previous month. For the first 11 months, domestic airlines carried about 47 million passengers.

In November, Air India fell below IndiGo in terms of market share, wtih Air India capturing about 17.1% to IndiGo’s 17.3%. Jet Airways and subsidiary JetLite led in market share at 26.2%, followed by Kingfisher Airlines at 19.1%, says the Ministry of Civil Aviation.

IndiGo had the highest seat load factor at 91% and Air India the lowest at 70% in November. IndiGo also had the lowest cancellation rate of 0.4% and Air India, the highest at 2.5%.

Analysis of capacity through available seat kilometers and demand measured by Revenue Passenger Kilometers (RPKs) data on a year-over-year basis indicates that although the capacity remained almost at the level of October 2010, the demand in November 2010 was comparatively more.

This has resulted in last-minute, or spot, pricing that has the government upset making it clear to airlines not to charge unreasonable fares. “This is a result of market dynamics,” says India and Middle East Head of Sydney-based think tank Kapil Kaul. “It is a seasonal phenomenon and will go away once the holiday season is over.”

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