Rising incomes boosting air traffic in India: IATA

The International Air Transport Association (IATA) has said that the growth in air passenger traffic across India is primarily due to rising income levels of people, and not because of low-cost carriers (LCCs). No-frills carriers have put in additional seat capacity which has pulled down air fares across the board. Lower fares have a chance of stimulating the market and that is what happening in India, said Brian Pearce, chief economist of IATA. He further added that some consolidation in the airline industry will cut seat capacity in the short to medium term, which is pushing yields (revenue per seat) down now. In calendar year 2006, the number of domestic air passengers is likely to reach 64 million passengers while the number of international passengers will move up to 27 million. The Sydney-based consultancy firm Centre for Asia Pacific Aviation (CAPA) has predicted that LCCs' market share in India will reach 70% by 2010, making it one of the world`s leading LCC markets in terms of total market penetration. Pearce also defended a move by many domestic airlines to impose a congestion charge of Rs 150 per ticket which was fiercely opposed by civil aviation minister Praful Patel saying, "because of delay in creating adequate infrastructure by the government, airlines are bearing huge costs in terms of air turbine fuel (ATF) being wasted".

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