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India’s domestic air passenger traffic growth hits five-year high

18 January, 2016

Domestic air passenger traffic growth hit a five-year high in 2015, driven by low prices and renewed consumer interest due to the strengthening economy, according to VCCircle analysis of data released by Directorate General of Civil Aviation (DGCA).  

Indian airlines carried 81.09 million passengers in the January-December period, a jump of 23 per cent from 67.38 million it had flown in 2014 with IndiGo consolidating its share in the market as Air India and a few other established players losing out. This is the first time in five years that the sector has seen double-digit growth and marks a contrast from 2012 when it had seen a dip in traffic.  

The analysis of data released by DGCA on domestic air traffic on Monday showed while domestic carriers saw a jump in domestic air traffic led by a 23 per cent growth over the last year, Air India, GoAir, SpiceJet and JetLite lost almost 10 per cent market share to IndiGo and new entrants like Vistara, Air Pegasus, TruJet and AirAsia.

Data for 2015 also showed that IndiGo, which has been the market leader for the past three years, consolidated its market share with a 39 per cent passenger growth as the airline captured two-fifths of traffic going to domestic private airlines.

While data from domestic air passenger seem in sync with the passenger car industry which also hit a record high with over 2 million sales for the last year, it was out of sync with MNI India consumer sentiment indicator which showed a drop of 9.3 per cent in 2015 over the last year.

Though the data clearly show a bounce back of the Indian middle class as automobiles and air travel are considered luxury goods, what remains to be seen is whether this upward trend will continue in coming months. With the government implementing recommendations of the Seventh Pay Commission and the rate cuts expected to kick in the third quarter of this fiscal, the economy may see further spurts in these indicators. But as rural India plunges more into a spiral of low productivity and depressed wages, what remains to be seen is whether it will only be the middle class that will see an uptick in prospects. 


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India’s domestic air passenger traffic growth hits five-year high

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