India’s Domestic Air Traffic Doubles in January, how will airline and travel share prices react?

Indian Domestic Air Traffic: Key Highlights from DGCA Report

The Directorate General of Civil Aviation (DGCA) recently came out with a report and it brought more good news for the travel and tourism sector.

The report revealed that India’s domestic air passenger traffic almost doubled in January 2023. Indian air carriers ferried 125.42 lakh passengers in the month of January. This denotes a rise of 95.7% from the previous year, when airlines carried just 64.08 lakh passengers.

Apart from this, there were some interesting data points revealed from the report. Let’s have a look at some of them:

Spicejet Leads in passenger load factors: For the month of December, Spicejet trumps others in passenger load factors. The budget carrier had a passenger load factor of 91%, followed by GoFirst and Indiaone Air at 90.9% each.

Passenger Load Factor is a metric used to measure how much of an airline’s passenger capacity has been utilized.

Indigo much ahead of peers in market share: In spite of recent troubles due to a promoter selling shares in the airline, Indigo continues to dominate the Indian air space. According to the DGCA data, Indigo commanded a market share of 54.6%. Air India comes in at a distant second place with a market share of 9.2% followed by Vistara at 8.8%.

Indigo cancellation remains high: The cancellation rate for the month of January stood at 1.41%. Among major airlines, Indigo’s cancellation rate remained highest at 2.09%. Meanwhile, Indiaone Air reported an impressive zero cancellations in January.

Issues related to weather remained the main cause for cancellations, contributing to 86.5% of the total cancellations in January.

Flight Problem emerged as the biggest cause of complaints: According to the DGCA report, the domestic airlines reported a total of 418 passenger complaints. Notably, the number of complaints per 10,000 passengers stood at 0.33.

Meanwhile, flight problems topped as the number one cause of complaints for passengers at 27.3%. This was followed by refund problems at 23.7% and baggage complaints at 20.6%.

IATA Report: The International Air Transport Association (IATA) also came out with data and there were some interesting highlights in the India context. The report observed that India’s domestic aviation industry stood at 2% of the global industry in 2022.

Meanwhile, in 2022, India’s domestic air travel reached 85.75% of the pre-covid levels.

Major Listed Indian Airline Stocks: A comparison

The airline industry has been under pressure due to the continued troubles of Covid along with other disruptions in the form of a slowing economy and a rising inflation rate. However, prospects for the industry are looking good for the future with the reopening and waning Covid fears. Now’s let’s have a glance as to how the share prices of the major listed airline companies have performed in the latest quarter:

( as on 22nd February 2023)

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.