Flying on the razor's edge in 2020

The year that has gone by – 2019 – was possibly the worst year for Indian aviation. Not only did it see the demise of Jet Airways but there was red ink on the balance sheets of domestic carriers. November 2019 brought relief to the industry as double-digit growth came back. Will that trend continue, asks AMEYA JOSHI?

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In April 2019, India recorded a slump in air traffic for the first time after mid-2013. The month-over-month traffic in domestic skies declined by 4.5 per cent. For a market that was used to growing at 20 per cent, this was a setback. April was the month when Jet Airways suspended operations. Against this backdrop, the aviation industry was elated to hear that November 2019 saw a double-digit growth in air traffic in India.

The year has been characterized by one bad news after another. From the grounding of B737 MAX, the demise of Jet Airways, the issues with Pratt & Whitney engines with the A320neo family and the heavy losses by airlines — the year has been especially bad for the industry in India.

The impact of the collapse of Jet Airways was particularly strong. While the airline had scaled down its operations in phases over the last few years and concentrated on its Mumbai, Delhi and Bengaluru hub – it still had sizable operations and stations where IndiGo was yet to venture or had operations at such stations where it was in duopoly. These stations – the airports of Bhuj, Bhavnagar, Rajkot and those in the North East – took a huge hit and are yet to recover.

Why did the traffic slow down?

Over the last five years, air traffic has been growing rapidly. However, this growth has come at the back of equivalent capacity induction in the market. All airlines put together and led by IndiGo were growing capacity by Available Seat Kilometers (ASKs) by a little over 20 per cent on average.