Date:31/12/2004 URL: http://www.thehindubusinessline.com/2004/12/31/stories/2004123102570100.htm

Back Private carriers continue to dominate domestic skies

Ashwini Phadnis
K.R. Srivats

New Delhi , Dec. 30

PRIVATE sector airlines continue to dominate the Indian skies, with their market share (in terms of number of passengers carried) inching further upwards during the first 11 months of the current calendar year.

Official sources said that the private sector airlines carried 1.03 crore domestic passengers during January-November 2004 against 80.24 lakh during the same period in 2003.

This translates into a market share of 62.9 per cent for private air carriers as against 37.1 per cent for the State-owned Indian Airlines for the period under review. During January-November 2003, the private sector airlines enjoyed a market share of 61.47 per cent against 38.53 per cent by IA in the same period.

Currently, there are three major private sector airlines - Jet Airways, Air Sahara and the low-cost Air Deccan — operating in the domestic market.

The market share of IA vis-à-vis other airlines in the domestic sector has been steadily declining in the recent years, official sources said.

The market share of IA in terms of the number of passengers carried during 2001-02 was 46.9 per cent. This share slipped to 41.7 per cent during 2002-03 and to 39.7 per cent in 2003-04 and 38.8 per cent up to August 2004.

In comparison, the market share of the domestic private sector airlines for the period in 2004-05 (up to August 2004) stood at about 61 per cent.

However, IA has been facing severe capacity constraint in the recent past and has been looking at leasing aircraft to meet its immediate requirements. The Public Investment Board only recently cleared the 43-Airbus aircraft acquisition plan of IA.

Although the airline has set up a committee to start price negotiations, it will be some time before the final nod is given and IA is in a position to start inducting new aircraft.

Industry sources indicated that it would take the manufacturers at least 15 months from the time the contract is signed to deliver the first aircraft.

While Jet Airways continued to be the market leader in the recent years, Air Sahara has been successful in increasing its market share from 5 per cent during 2001-02 to 9.8 per cent in 2002-03 and 13.1 per cent in 2003-04.The market share of Air Sahara during 2004-05 (up to August) stood at 14.5 per cent.

Interestingly, the total pie - the number of domestic passengers carried by IA and private airlines - has increased during January-November 2004 to 1.63 crore against 1.31 crore during the same period in the previous year.