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Home > Business > Business Headline > Report

Aircraft seat use falls 8.5% in six years

Amrita Dhar in New Delhi | July 02, 2003 13:13 IST

Though there has been a 34 per cent capacity increase in the Indian aviation market in the past six years, the rate of each seat utilisation has dipped 8.5 per cent.

Data from the ministry of civil aviation shows that overall seat factor has dipped from 63.8 per cent to 55.3 per cent in the same period.

This is because the number of passengers carried daily in the three domestic airlines has grown by only 11 per cent from 1998-99 to April 2003.

The daily revenue passenger kilometre has increased by only 15.8 per cent for the same period.

According to industry experts, this situation has primarily induced these airlines to introduce the highly discounted advanced purchase excursion fare schemes and other such fare packages from last year. They added that the APEX fares had reduced yields and diluted market share.

Experts warned that this kind of situation, where the capacity increase was not in sync with the market growth, can be suicidal for the existing players.

"Air service industry across the world operates on the principle of a concomitant increase in capacity and traffic. It is only in India where in spite of a minuscule growth in traffic, there has been a major increase in capacity. This has led to the bottomlines of the airlines being severely affected," said an aviation industry expert.

The data reveals that Jet Airways has increased its capacity by 71 per cent from 14.2 million available seat kilometre per day in 1998 to 24.4 million ASK per day in April 2003.

On the other hand, Air Sahara has increased its capacity by 177 per cent from 3 million ASK per day in 1998-99 to 8.3 million ASK per day in April 2003.

The capacity share of Jet Airways has increased from 32.7 per cent in 1998-99 to 41.9 per cent as of April 2003, while Air Sahara's has increased from 6.9 per cent to 14.2 per cent for the same period.

Indian Airlines' capacity has declined from 26.3 million ASK per day in 1998-99 to 25.6 million ASK per day in April 2003, which has resulted in a drop in its capacity share from 60.5 per cent to 43.9 per cent.

Passenger and revenue figures, however, are hardly heartening.

The seat factor from Jet Airways has declined from 66.2 per cent to 60.8 per cent, while that of Indian Airlines has gone down from 64.6 per cent to 50.2 per cent for the same period. Only Air Sahara has managed to increase their seat factor from 46.7 per cent to 54.7 per cent.

The daily passenger figure has also grown from 31,042 in 1998-99 to 34,515 in April 2003. The revenue passenger kilometre has also grown very slightly from 27.8 million per day in 1998-99 to 32.2 million in April 2003.

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