Small airports see dip in passenger traffic in Jan-Mar

The airline recently ordered wide-body planes, aims to operate non-stop overseas flights from Indian metros

letteğs@hindustantimes.com NEW

India’s airlines are moving capacity to high-density routes between metros, from flights connecting smaller cities and towns, which spiked fares that affected passenger growth in these places in the three months to March, according to data from the Airports Authority of India (AAI).

Cities like Ahmedabad, Srinagar, Chandigarh, Patna, Nagpur, Darbhanga, Jammu, Dehradun, Kochi, Ranchi, Raipur and Udaipur have seen a decline in domestic passenger in the first three months of 2024, showed data collated by the state-run airports operator. The metros continued to grow passenger footfalls.

In Bihar’s Darbhanga, for instance, traffic declined by as much as 27.2% in the March quarter, compared to the same period last year. The decline in passenger footfalls in Nagpur was 13.7%, Jammu 11.7%, Chandigarh 8.8%, Patna 8.3%, Udaipur 3.7%, Srinagar 3.1%, Ranchi 2.8%, Ahmedabad 2.5% and Kochi 0.3%, the data showed.

This is for the first time in the past five years that the number of domestic passengers at tier-II airports has declined. This slump at smaller airports was in line with a trend being played out in India after the pandemic, when larger cities and premium segments started driving expansion.

The main reason for the trend is that airlines are shifting capacities from smaller towns to the metros, experts said. High airfares due to capacity constraints could be the culprit, said Ajay Prakash, owner of Nomad Travels and president of the Travel Agents Federation of India, a lobby group. “These numbers are also a perfect example of unequal distribution of wealth in the country,” he added.

India’s carriers have been struggling with various issues, including the grounding and subsequent insolvency of budget airline Go First in May due to engine snags, and the grounding of at least 100 planes of market leader IndiGo for similar problems.

The decline is also attributed to capacity rationalization that has led to airlines shifting flight capacity from smaller cities to larger ones, airline executives said. “Airlines do not leave the market. They instead reduce their capacities from smaller markets to focus on the premium ones, the ones that give them more revenue,” an executive said, requesting anonymity. “The best example is Nagpur. Decrease in domestic passengers at Nagpur is worrying.” anu.shağma@livemint.com NEW

India’s largest domestic airline IndiGo has set a clear target for itself with its first wide-body aircraft order that it placed recently. It wants to develop multiple hubs in the country, providing direct connectivity to faraway destinations from different metro cities with Airbus A350 and Airbus A321 XLR (extra long range) aircraft, set to join its fleet 2025 onwards.

The Airbus A321 XLR planes are expected to be used for non-stop, 7-8 hour flights to Europe and the Far East countries.

In a conference call on the induction of wide-body aircraft on Tuesday, IndiGo chief executive officer Pieter Elbers said that the airline sees potential of different strongholds across various parts of the country such as Delhi, Mumbai, Hyderabad, and Bengaluru, and given the country's geographical position, it is optimistic of seeing some overlapping as well as unique connections through different metro cities.

“There is a linear decline in market share of Indian carriers in international markets beyond 5-6 hours. Indian carriers are significantly underrepresented in wide-body, long-haul market. We should be able to compete with global aviation hubs,” Elbers said in a conference call with analysts and journalists.

On 25 April, IndiGo placed a firm order of 30 Airbus A350-900 aircraft that will help the low-cost airline offer non-stop flights to Europe, the UK, the US, and Australia from India. While the airline and the aircraft manufacturer did not share the cost of the acquisition, it is estimated to cost IndiGo over $9 billion, based on 2018 list prices. The European aircraft manufacturer has stopped publishing list prices of aircraft since 2019.

In addition to the firm or confirmed order of 30 A350-900 order, IndiGo has also secured purchase rights for an additional 70 Airbus A350 family aircraft. Currently, the airline operates low-frill flights with all-economy seats through a fleet of Airbus 320 aircraft, which can seat between 180 and 220 passengers. With this order, IndiGo will join the wide-body segment, which so far has only Air India and Vistara both Tata Group companies.

The airline reiterated that the decision to order 30 Airbus A350-900 aircraft was a conscious one after extensive evaluation, and it is also in line with the government’s ambition of creating global aviation hubs in the country.

“India is expected to become the world’s third-largest economy by 2027, the aspirations of Indian consumers are growing to travel, not only in the region but even further, and the growth of IndiGo as an airline has led to this deliberate decision,” Elbers said.

IndiGo aims to deploy 30% of seat capacity on international routes, from 27% currently. This is expected to grow further with the induction of A321XLR aircraft from 2025 and A350 aircraft from 2027. Currently, IndiGo is the largest domestic and secondlargest international airline after Air India group, and operates around 2,000 flights a day.

“Today we operate around 350 aircraft, by 2030, we will be operating 550-600 aircraft...between the A350 and A320 family, there will be similarities in a lot of elements, we will have synergy in cockpit crew, methodologies etc,” Elbers said.

IndiGo did not disclose whether it will operate a low-cost wide-body product or will add some full-service facilities, but said that it will maintain costleadership in its wide-body product as well.

“For way too long, Indian customers had difficulty reaching their destinations and with our new product, we feel that they will have the opportunity to fly direct,” Elbers said.

TAKE-OFF< AWAITED CEO

lineağ

INDIAN

The main reason for the trend is that airlines are shifting capacities from smaller towns to metros, experts say

siŇnificantly

HT IndiGo will offer non-stop flights to Europe, the UK, the US and Australia.

HT The slump at smaller airports was in line with a trend playing out in post-pandemic India.