October has been a disastrous month for the Maharaja. Air India clocked its lowest ever market share number for the whole of 2016. It ranked first in passenger complaints, second-last in On Time Performance (OTP) at the four metros and fifth (amongst nine airlines) on Passenger Load Factor for the month of October. And all this happened when there is an overall surge in domestic air passenger traffic.
In India, the domestic passenger traffic is growing at an average of 20-23 per cent every month all through the year. As it is, the October to December period is considered one of the best in the year for the domestic travel industry due to holidays and festivals falling in these three months. It appears the national carrier conceded its marketshare to the rivals. That is the best possible explanation given the statistics.
Sadly, the latest data furnished by the Directorate General of Civil Aviation (DGCA) shows that Air India’s marketshare for October stood at 13 per cent, down from 14.7 per cent in September. But that is not the whole story. When compared to the previous nine-month marketshare data, Air India appears to have lost a full three percentage points since January. In January, Air India’s marketshare stood at 16 per cent and was the highest in the current calendar year.
While Air India’s market was shrinking, that of the market leader Indigo was increasing. In October, Indigo has cornered a marketshare of 42.6 per cent, its best ever in 2016. It gained 2.6 percentage points compared to its previous high of 40 per cent that it had cornered in September.
Air India’s rival fullservice carrier Jet Airways had a marketshare of 14.7 per cent for October, a loss of 1.5 per cent over the September’s marketshare figures. Low-cost carrier Go Air (7.9 per cent) had the lowest marketshare in comparison to Air India, Jet Airways, Spicejet and IndiGo for October, the DGCA data further shows. Air India’s combined OTP at India’s four busiest airports was 71.8 per cent in October. It was only a little better than GoAir. A few weeks ago, the ministry of civil aviation had conceded in the Parliament that the national carrier had suffered an operating loss of Rs 246.14 crore for the April-June quarter this year mainly due to a decline in passenger and cargo traffic.
As per the provisional figures, Air India is projected to clock an operating profit of Rs 1,086 crore by 31 March 2017 as part of its turnaround plan. Therefore, eroding marketshare and declining revenues will not help its cause much. Steps like the rationalisation of loss making routes, closure of overseas offices at certain locations or reduction in maintenance costs are already in place. Will any of these steps finally help Air India? Watch this space for more.
BW Reporters
Ashish Sinha is an experienced business journalist who has covered FMCG, auto, infrastructure, tourism, telecom among several other beats. Ashish has keen interest in the regulatory scenario impacting different sectors. He writes on aviation, railways, post and telegraph, infrastructure, defence, media & entertainment, among a wide variety of other subjects.
