Lower fares, onset of tourist season and the addition of new routes by domestic airlines pushed the passenger traffic higher. (Image for representation: PTI)
India to end 2019 with 640 civilian aircraft, 4% traffic growth despite economic slowdown
By India Today, 29 Dec. 2019

India is expected to end the calendar year 2019 with around 640 civilian aircraft and a 4 percent jump in passenger traffic despite a general economic slowdown along with the grounding of a major domestic carrier.

According to Arun Kumar, Director General of the Directorate General of Civil Aviation: "Domestic airlines have augmented capacity since Jet's grounding. At that time the number of total aircraft in the country had fallen to 540."

Subsequently, capacity augmentation led to the growth of passenger traffic which is expected to be around 4-5 percent for the calendar year 2019.

"The capacity augmentation has led to the growth of passenger traffic which had drastically fallen after Jet's grounding. We estimate a growth of 4-5 percent for the year 2019," Kumar told IANS.

"This growth has occurred despite the subdued economic environment and capacity constraint caused due to Jet's grounding."

Lately, passenger traffic had contracted in April-September due to factors such as economic slowdown, high fares, and capacity constraint.

Nevertheless, lower fares, the onset of tourist season and the addition of new routes by domestic airlines pushed the passenger traffic higher.

While in October, the traffic growth rate had inched up 3.98 percent to 1.23 crore on a year-on-year basis. In November, the traffic grew by 11.18 percent to 1.29 crore from 1.16 crore reported for the year-ago m

The data also showed that January-November passenger traffic grew by 3.86 percent to 13.11 crore from 12.62 crores ferried during the year-ago period.

A recent International Air Transport Association's (IATA) traffic report showed that India's year-on-year domestic air passenger traffic growth rate to 3.6 percent in October from 1.6 percent in September.

Industry insiders have blamed the economic slowdown for slowing India's air passenger traffic growth.

Nonetheless, since the grounding of Jet Airways, the industry has shown resilience to the slowdown that has impacted several sectors and shrunk the real GDP growth to a 25-quarter low in Q1FY20.

The passenger traffic growth is considered a key high-frequency indicator of the country's macro-economic health.

Recently, rating agency Investment Information and Credit Rating Agency of India Limited (ICRA) said that it expects domestic air passenger traffic growth for the current fiscal to be 4.5 percent, after five years of double-digit growth.

"A series of events during the current fiscal such as discontinuation of operations of Jet Airways, grounding of the Boeing 737 Max aircraft due to technical issues with its flight control software, and issues with the Pratt & Whitney engines for Airbus 320 Neos have impacted the industry's capacity and thus passenger growth," the ratings agency said in a report.

"Moreover, many domestic airlines are focussing on expanding on the international routes. ICRA thus expects FY2020 to witness a muted domestic capacity growth, as measured by available seat kilometer of 3 percent in FY2020. The domestic passenger traffic growth for FY2020 is also expected to be lower at 4.5 percent, after five years of double-digit growth."