Octoberfest for airlines as traffic grows 37% due to Indian travelers

Indian passengers have taken to the skies with full force again. Or perhaps they can't resist the attractive rates that airlines are Boeing's Top 15 global airlines offering. At least, that's the picture that recent figures for passenger growth seem to be portraying.

While airlines are still mulling over their lack of profitability, the number of those travelling by air has seen solid double-digit growth in October, almost catching up with what it was two years ago. In October this year, the aviation industry saw a 37% growth in number of passengers against a growth of 19% in August this year and around 11% increase in September. In fact, the growth rates in October gain even more significance when compared to what they were in the buoyant markets of October 2007, when growth was around 43%. In the turbulent market of October 2008, the growth had dipped to 15%.

Interestingly, these figures include not just domestic travel but also international travel. Experts feel that while the swing in passenger sentiment actually began earlier; it became markedly visible in the second quarter of this financial year.

While the recovering economy and the availability of liquidity due to buoyant stock markets seems to be the backdrop against which this growth is poised, the immediate trigger seems to be the festival season and the low fares. "With attractive packages and low rates offered by airlines the holiday season has received a good response for outbound and domestic market, leading to an increase in the number of passengers travelling," says Kashmira Commissariat, COO of the outbound division at travel and tourism company, Kuoni India. Analysts say there has been a 10% year-on-year growth in the aviation sector.

Even though airlines can now boast of more passengers, particularly in the low cost segment, experts argue that the recovery in terms of passenger traffic is still not relating to growth in profits, and that the increase in numbers comes at the cost of declining yield.

Source: - Economic Times

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