India’s smaller cities are losing out on air passenger growth, as airlines move capacity from routes connecting smaller towns and deploy them on high-density routes leading to higher fares on these routes, thus, impacting passenger growth, Airports Authority of India (AAI) date showed.
Data sourced from AAI show major tier-2 cities like Ahmedabad, Srinagar, Chandigarh, Patna, Nagpur, Darbhanga, Jammu, Dehradun, Kochi, Ranchi, Raipur and Udaipur have registered a decline in domestic passenger during the first three months of 2024.
The bigger city airports continue to register an increase in passenger footfalls.
The data also indicates that it is the first time in the last five years that the domestic passengers at tier 2 airports have declined.
Also Read: Traffic congestion at Mumbai Airport improved, claims aviation ministry
Prominent figures involved in the aviation sector say that the primary reason for this trend is airlines shifting capacities from smaller towns to tier 1 cities.
Ajay Prakash, owner of Nomad Travels and President of Travel Agents Federation of India (TAFI) said that it is tough to have a definite reason for such a decrease, however, high airfares due to capacity constraint could be the culprit.
“These numbers are also perfect example of unequal distribution of wealth in the country,” Prakash added.
Airlines being grounded and pruning of planes has only compounded this problem.
Go First was grounded in May last year due to engine issues while at least 100 planes of market leader IndiGo were grounded too due to similar issues.
Aviation experts HT spoke to also attributed the issue to the decline in capacity rationalisation that has led to airlines shifting flight capacity from smaller cities to larger ones.
“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,” said an aviation executive requesting anonymity.
“The best example is Nagpur. Decrease in domestic passengers at Nagpur is worrying. The reason for significant decline in domestic passengers for Nagpur airport where IndiGo operates maximum flights,” he added.
Another aviation sector executive on the condition of anonymity said, “To me the reason for the decline in passenger footfalls at selective tier 2 important city airports is the supply chain issues leading to aircraft crisis.”
Go First filed for insolvency last year saying they were not able to run operations due to lack of plane engines.
The company had said that a large number of aircraft were grounded due to want of Pratt & Whitney engines, which was not available due to supply chain issues impacting engine’s availability.
Simultaneously, the country has also been undergoing various mergers as well, Vistara is legally expected to merge with Air India soon.
AirAsia India and Air India Express have been merged to become AIX Connect.
Hence, India will soon have airlines four airlines namely IndiGo, Tata group airlines, Akasa Air and SpiceJet.
Speaking about the airlines’ strategy at the current situation, an airline official said, “The airlines’ immediate survival is the priority, and they are seen working towards it. IndiGo has been wet leasing aircraft and airlines like Air India has been slowly inducting their aircraft from their order book.”
IndiGo, Tata Group and Akasa ordered over 1,100 aircraft worth $140 billion at list price between February last year and January this year.
Get Current Updates on India News, Elections 2024, Election 2024 Date along with Latest News and Top Headlines from India and around the world.