Aviation companies stock were trading at lower levels, noted ICRA, the ratings agency as the international passenger traffic witnessed a degrowth of 8.2% in August. Whereas, the situation was flipped for the domestic passenger traffic which witnessed a growth of 3.9% in the same month. Due to underperformance, the market share declined by 34.2% in the August month. ICRA also noted that that the traffic growth on international routes in the first five months of current fiscal was a negative decline. This year, the decline was much more at 12.2% as compared to only 0.1% decline in the same period a year ago.
International Market Share of Indian Airlines Declines
The market share of Indian Airlines also declined on international routes by 377 basis points own to 34.2% because of underperformance. Even with this, the airlines did see a sequential improvement of 214 basis points. However, there is a favourable international scenario for the airlines, so its likely that the Indian carriers would be planning to expand capacity and new routes on the international waters in the near future.
Good Growth Expected in Domestic Passenger Traffic
Talking about the domestic passengers, the volume saw a 2% growth year on year. The growth in the industry capacity (measured in available seat kilometres ASKMs) continued to be muted in August at 2.4%, primarily due to Jet Airways grounding in April. As per the ICRA report, the domestic space will continue to be critical for the airlines as these carrier continue to expand their fleet. As such, the domestic passenger traffic is expected to increase in the near to medium term.