Despite low fares offered by airlines in January, passenger traffic in both domestic and international sectors dropped 8 per cent in February from a year ago, according to data compiled by Amadeus, the network platform that controls more than 55 per cent bookings. Government data is yet to be released.
“The sentiment for air travel is just not there. The regular flyers are availing cheap fares. The targeted group is not interested to fly at even zero base fare. Airlines are confused. So you see erratic movement of fares,” said Ankur Bhatia, managing director, Amadeus India.
In January when airlines launched a price war, passenger traffic had reported a contraction of 14 per cent from a year ago.
The fares went up and then down again as the Civil Aviation Ministry intervened.
Bookings for the first few days of March are also not encouraging.
“The same subdued sentiment continues. On Tuesday we saw an encouraging trend and the next day the numbers declined,” said Bhatia.
Airline officials asking not to be identified said they have to deal with the market reality and competitive pressure irrespective of the consequences.
The situation leaves greater challenges for revenue management heads of airlines who are responsible for improving yields and are offering seats at discounted prices to lure passengers and maximize revenue. But some industry officials say these schemes are used by regular passengers who would anyway pay normal fares to fly.