India’s aviation sector: The capacity conundrum

New Delhi, August 28, 2018:  I write on India’s well-established entrepreneurs and corporate houses, covering a range of sectors. In a nutshell, I’m the Jack of all business news beats. In addition, I am the go-to reporter for aviation news at Forbes India.

Domestic passenger traffic for the six months till June has grown by 22 percent from a year ago. All major airlines are flying at higher load factors
By all appearances, India’s aviation sector is sitting pretty. A cursory look at data from the civil aviation regulator suggests that the country’s airlines are in cruise mode—domestic passenger traffic for the six months till June has grown by 22 percent from a year ago and all major airlines are flying at higher load factors (a measure of capacity utilisation) compared to last year according to forbesindia.com.

However, appearances are often deceptive. Like retailers try to sell a perishable commodity at throwaway prices before it gets spoilt, unsold seats in airlines too have been going for a song. While this has elevated traffic and load factor figures, analysts say the numbers are an unsustainable aberration.

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