As a result, the gap between the number of seats available and the demand only widened raising serious questions on many of the carriers viability in the coming months. The number of passengers who took to the air between January-March was 12 million while the number of seats offered was virtually double at 20 million seats.
In terms of market share of carriers together, low-cost carriers continued to gain over full-service airlines. But this was primarily because of a substantial increase in the market share by budget carriers SpiceJet and IndiGo even while Jet Lite, Go Air and Deccan lost market share.
Budget carriers together grabbed 46.7 per cent of the market (last year it was 44.5 per cent), the rest being with full-service carriers.
Amongst the full-service carriers only Kingfisher gained market share while all the others, including Jet Airways and Air India's domestic wing, lost market share.
"While full-service carriers like Air India and Jet have been losing market share due to the new capacity added by new airlines, JetLite and Deccan lost some market share because of route rationalisation and a lot of their flights being curtailed during the year.
For instance, Deccan decreased the number of daily flights between Delhi and Mumbai to four from six during the year," said Mohit Srivastava, head (online sales) for travel portal Makemytrip.
All three carriers Spice Jet, IndiGo and Kingfisher added considerable capacity throughout the year, which helped to push market share.
"The market share figures are specifically related to current market size. Some of the increases in market share have been primarily achieved through huge capacity additions by some of the operators. The rampant capacity additions made by some players has resulted in the current over capacity scenario," said Edgardo Badiali, CEO, Go Air.
The carrier decreased the size of its fleet by one aircraft during January-March 2008 compared with January-March 2007.
"There has been a slowdown in increase of traffic. Traffic has only increased by 15-16 per cent in the last three months whereas it increased by around 25 per cent during the last year. This is a key reason for the fares coming down drastically in the last three months. We expect this trend to continue," said a senior executive of a low-cost carrier.
Looking at deceleration in traffic, airlines have been offering basic fares ranging from Rs 0 to Rs 99 throughout this summer.
Coupled with that, some of the carriers like Spice Jet and IndiGo are looking at ways to slowdown their capacity expansion by getting lesser aircraft deliveries or shortening their lease periods.
