Air traffic growth to be affected by sharp hike in fares: CMIE

Last Updated: Thursday, August 16, 2012 - 20:02

Mumbai: A major financial think-tank has scaled down its forecast on air passenger traffic growth this year from 11 to seven percent, citing a sharp rise in fares due to a major hike in charges by private operators of Delhi and Mumbai airports.

"We now expect air passenger traffic to grow by seven percent in 2012-13 as against our earlier estimate of 11 percent," the Centre for Monitoring Indian Economy (CMIE) said in its latest report.

A sharp rise in air fares in order to pass on the high user development fees at various airport particularly at Delhi and Mumbai was a major contributing factor that has hit passengers volumes, the Mumbai-based think-tank said.

The total passenger volume is expected to stand at 1,737 lakh by March next year, the CMIE projected in its report.

Observing that air passenger traffic reflected a modest 4.1 percent growth in April-May this year after having clocked an overall 13.2 percent growth in the previous fiscal, it said this deceleration could be attributed to the curtailment of schedules by two major airlines -- Air India and Kingfisher.

Domestic carriers opting out of non-profitable routes during this period also played a part in this low growth.

In May, passenger traffic grew by a sedate 1.1 percent year-on-year to 143.7 lakh passengers. The domestic tarffic rose by a minuscule 0.1 percent to 108.5 lakh, while global traffic grew faster, yet modest 4.1 percent to 35.1 lakh passengers, the report said.

"Although the growth rate in passenger traffic for the year so far is very poor, we expect certain factors to lift passenger volumes as the year progresses," the report noted.

CMIE said it expected a slight improvement in passenger traffic over the next 2-3 months on the back of aviation regulator DGCA asking airlines to rationalise airfares. The upgradation of Chennai and Kolkata airports was also expected to give some fillip to air traffic growth, it said.


First Published: Thursday, August 16, 2012 - 20:02

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