The latest data from the Airports Authority of India (AAI) reveals a significant downturn in air passenger traffic across several smaller cities in India, signalling a notable shift in the country’s aviation landscape.
Cities such as Ahmedabad, Srinagar, Chandigarh, Patna, Nagpur, Darbhanga, Jammu, Dehradun, Kochi, Ranchi, Raipur, and Udaipur have witnessed a decline in domestic passenger numbers during the first quarter of 2024. This decline contrasts sharply with the continued growth observed in metropolitan areas, underlining a distinct trend in air travel dynamics. Experts attribute this decline to the strategic reallocation of airline capacities from smaller towns to high-density routes between major cities. As a result, airfares have surged, adversely affecting passenger growth in smaller cities and towns. Ajay Prakash, President of the Travel Agents Federation of India, noted that the disparity in passenger numbers underscores the unequal distribution of wealth in the country, highlighting broader economic implications.
Industry insiders point out various challenges faced by Indian carriers, including operational issues such as the grounding of aircraft due to engine problems and capacity rationalisation strategies. Airlines have strategically reduced flight capacities from smaller markets to focus on routes with higher revenue potential, thereby exacerbating the decline in passenger footfall in tier-2 cities. This trend is exemplified by the decline observed in cities like Nagpur, prompting concerns about the impact on regional connectivity and economic development. Supply chain disruptions and aircraft crises further compound the challenges faced by smaller airports, contributing to the decline in passenger numbers. For instance, the withdrawal of flights by carriers like SpiceJet has impacted airports such as Darbhanga, which started operations under the UDAN scheme in 2020. Moreover, ongoing mergers within the domestic aviation sector, including the anticipated merger of Vistara with Air India, reflect broader consolidation efforts aimed at ensuring industry sustainability.
Despite these challenges, the sector remains optimistic about future growth prospects. Major players like the Tata Group, IndiGo, and Akasa have made substantial aircraft orders, signalling long-term confidence in the market. Projections by rating agency Icra suggest a moderate increase in domestic air passenger traffic for the fiscal year 2024-25, indicating resilience amidst current industry dynamics.
