Air India’s market share sinks to lowest ever in 2022

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Air India recorded its lowest-ever market share of 8.7% on an annualised basis in 2022, raising challenges for new owner Tata group to achieve the stated target of capturing nearly a third of the domestic market. However, on a month-on-money basis, the airline improved its market share marginally to 9.2% in December compared to 9.1% clocked in November.

In all, Air India and Air India Express — the two airlines that the Tata group bought a year ago — ended 2022 with a share of 8.7%.

Vistara closed the year with a share of 9.2% while AirAsia ended with 6.2%, according to data shared by the Directorate General of Civil Aviation (DGCA). All these airlines, which are part of the Tata Group, had a combined share of 24.1% in 2022, which has remained unmoved since 2019.

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Touted as a transformation plan unveiled five months ago, Air India said it is working to grab 30% share of the domestic market under Vihaan.AI by 2027. But Air India’s rivals did not let go of their market share by much, in fact the market leader improved its share last year making it the best-ever year.

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InterGlobe Aviation-promoted IndiGo increased its market share to 56.1% in 2022 from 54.85% clocked in 2021. While Go First (formerly Go Air) closed 2022 at the same market share level, at 8.8%, as of 2021, new entrants like Akasa Air are chipping away market shares fast. Ajay Singh-led SpiceJet’s market share hit a multi-year low at 8.7% in 2022.

All of the four Tata group airlines put together, the number of passengers carried at 2.98 crore last year was less than half compared to IndiGo’s 6.91 crore during the same year. Indigo passenger load factor (capacity utilisation) stood at 80.1% against Air India’s 77.6% during 2022.

During December, SpiceJet topped the PLF chart with 92.7% followed by Go First at 92.6%. Both the airlines faced the DGCA’s ire during the year for failure in following standard procedures or increase in safety-related incidents. From its debut in August 2022, Akasa Air —the country’s newest airline — added its 12th destination Mopa, Goa, earlier this month. The Rakesh Jhunjhunwala-promoted airline mopped up a 2.3% market share in December.

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IndiGo, Vistara, Go First, AirAsia and Akasa announced discounted fares on select routes to keep the demand momentum going. While demand remains upbeat, high aviation turbine fuel (ATF) prices continue to eat into the airline’s margins.

Suprio Banerjee, vice-president & sector head — Corporate Ratings, Icra, said, “A steady rise in prices of ATF and the general inflation continue to dampen the industry earnings, with ATF prices in January 2023 higher by about 55% y-o-y. FY23 has witnessed a quick recovery in domestic passenger traffic, aided by normalcy in operations and the waning impact of the pandemic.”