IndiGo’s Passenger Load Factor Drops The Most In 18 Months
Even as it expands aggressively, India’s largest airline is struggling to utilise capacity to the fullest.
The passenger load factor of InterGlobe Aviation Ltd., IndiGo’s parent, declined to an 18-month low in August as it added more seats and introduced air routes. A measure of capacity utilisation, the passenger load factor of the airline declined by 590 basis points to 82.8 percent compared with the last month, according to data released by the aviation regulator Directorate General of Civil Aviation.
IndiGo’s capacity utilisation has fallen the most among its peers. At 11 lakh seats in the last two years, the airline contributed the most to fresh capacity addition by Indian operators. This is greater than that added by Air India Ltd., Jet Airways (India) Ltd. and SpiceJet Ltd. together.
From the end of Q1, Indigo has added nearly 17 aircraft, taking the total count to 186. This strong capacity addition in a seasonally weak period for travel has led to a fall in passenger load factor for IndiGo as passenger growth trailed capacity addition.Santosh Hiredesai, Lead Aviation Analyst, SBICAP Securities.
Passenger growth in the world’s fastest-growing aviation market slowed to 17 percent—the lowest in three months—in a seasonally weak period. More than 1.13 crore passengers flew in August, according to DGCA data.
Passenger growth was primarily led by IndiGo, GoAir and AirAsia India. However, growth was muted for the other two listed airline companies—Jet Airways and SpiceJet.
- SpiceJet’s passenger growth was 3 percent—a 34 month-low.
- Jet Airways’ passenger growth was 1.5 percent—an 18 month-low.
IndiGo’s market share over the last month remained largely stable at 42 percent—which was the case with the other major operators, too.
IndiGo’s flight cancellation rate rose sharply to 2.52 percent—a 14-month high—due to the floods in Kerala and grounding of some of its A320neo planes. The rate was also above the industry average for the first time in the last five months.
Engine troubles had dogged IndiGo in March when it was asked to ground aircraft, leading to the cancellation of over 900 flights.