Not Jet Airways collapse, but lack of vision and comprehensive policy have stifled the tourism and aviation industry

Lost tourist

The Jet Airways crisis was no doubt an unfortunate event. It affected millions of people including passengers, staff and others associated with the airline.

DGCA released the passenger data for the month of May 2019 which would indicate the immediate impact of the airline’s caesurae of operations.

Surprisingly, the load factor of a few airlines dropped marginally as compared to the same month in 2018. The month May marks the beginning of the tourist season and in the past passenger growth has witnessed a growth of 18-22%. In 2019, the passenger growth has come down to a dismal 2.96% MoM and 2.62% YoY.

The question arises is, where have the passengers which Jet Airways used to carry gone? Has the Indian tourism industry hit the rock bottom?

Passenger growth

May 2019 passenger growth data
May 2019

Passengers carried by domestic airlines during Jan-May 2019 were 586.54 lakhs as against 571.58 lakhs during the corresponding period of previous year thereby registering a growth of 2.62%.

Passenger load factor

Load factor comparison
Load factor comparison

The passenger load factor in the month of May 2019 has shown marginally
increasing trend compared to the previous month due to the ongoing tourist season.

mindFly analysis

There has been a passenger growth of 2.62% YoY and 2.96% MoM. The passenger growth in 2018 was significantly higher at 22.69% YoY and 16.53% MoM. The reason recorded in the DGCA report is due to the onset of tourist season. The year 2015/16 similarly recorded a growth of approx. 20% in passenger growth.

The airlines carried an additional 3.51 lac passengers in the month of May 2019 as compared to May 2018.

In May 2018, Jet Airways and Jet lite combined carried a total of 18.08 lac passengers.

The load factor comparison between May 2018-19 has not recorded a significant increase and in some airlines has marginally dropped.

Load factor comparison 2018-19
Load factor comparison May 2018-19
International tourist
International tourist

There has been a steady decline in international tourist in the past 3 years. India needs to be concerned. More surprising is the sharp decline at the beginning of the tourist season in May 2019.

Load factor is an indicator that measures the percentage of available seating capacity that is filled with passengers. A high load factor indicates that an airline has full planes with most seats occupied by passengers.

  • There is a significant drop in YoY & MoM passenger growth.
  • The load factor of major airlines has not increased dramatically to indicate redistribution of Jet Airways passengers.
  • Since there was adequate capacity available as shown by the load factor, there was a dramatic drop in passenger travel during the tourist season.
  • Smaller countries have been registering bigger growth in tourist traffic.

Fastest-growing tourist destinations for 2019 by percentage: 

  1. Egypt — 55.1%
  2. Togo — 46.7 0%
  3. San Marino — 31.1%
  4. Vietnam — 29.1%
  5. Georgia — 27.9%
  6. Palestinian territories — 25.7%
  7. Niue — 25.4%
  8. Nepal — 24.9
  9. Israel — 24.6%
  10. Northern Mariana Islands — 24.3%

Lack of vision and comprehensive policy has stifled the tourism and aviation industry. India, with the greatest potential in terms of cultural and natural heritage has been languishing due to the apathy of the governments in succession and a poor foundation.

 

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