India's domestic air travel demand down 4.9% in Jan

India's domestic air travel demand declined by 4.9 per cent and the sector witnessed a 5.3 per cent capacity reduction, according to International Air Transport Association (IATA).

According to a report by IATA, the market's load factor -- a measure of the amount of utilisation of the total available capacity of the aircraft -- stood at 75.9 per cent during the reported month.

"India's domestic market was also in negative territory with a 4.9 per cent decline in demand and 5.3 per cent capacity reduction," it said.

"One of the major domestic players has effectively exited the market, economic growth is weak, infrastructure costs are rising and the impact of high fuel prices is being exaggerated by excessive taxation (particularly at the state level)," it added.
The IATA global air travel demand statistics for January shows a continuation of the uptick in passenger travel that began at the end of 2012.

Overall, demand was up 2.7 per cent on the previous January which is slightly ahead of the 2.2 per cent expansion in capacity. Load factors stood at 77.1 per cent.
Strong demand for air travel driven by the Chinese New Year has distorted the January figures, the report said. Chinese New Year fell in January 2012 and in February this year, it added.

The comparisons to such a strong month made January, 2013 demand look weaker than the underlying trend would indicate.

After adjusting for such seasonal factors, IATA estimates that the actual growth would have been 3.5 per cent. This growth is still lower than the 5.3 per cent 2012 average.

"Passenger travel is growing in line with business confidence levels. Recent months have seen some positive economic signs emerge in both the US and China, and the euro-zone crisis seems to have stabilised.

"Of course risks remain; the impact of US budget cuts has yet to play out and fuel prices are high. But even with those headwinds – real and potential – we still see underlying support for continued and potentially even strengthened growth," said Tony Tyler, IATA's Director General and CEO.

In terms of international air travel, markets outperformed the global industry average in January with a 3.7 per cent increase in demand against a 2.7 per cent capacity expansion.

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