According to the International Air Transport Association (IATA), India restores its title of being world’s fastest growing domestic air travel market in May. India noticed the growth of about 17.7% as compared to its previous year data in the same month.
IATA claimed that India till March had been the fastest growing domestic aviation market for 22 months in a row but in April, Russia overtook India by witnessing 16.7% growth as compared to India’s 15.3%. But India reclaimed its position in the next month itself.
According to IATA the fastest growing markets includes India, China, Russia and Japan which saw double digit growth in domestic air travel with 17.7%, 16.8%, 12.8% and 10.3% respectively. While growth in India are moderating from 20% plus in past two years. The main reason behind these figures are because of increasing oil prices due to which airlines are hiking fares leading to a fall in passenger traffic growth.
IATA said in a statement that “After adjusting for inflation, airfares at the start of the second quarter were around 6% lower than a year ago. IATA estimates that this contributed to around 40% of the annual growth in passenger traffic seen in May. However, the degree of fare stimulus is around half that seen in the second half of 2016. This stimulus is likely to fade further in light of rising airline cost pressures, while business confidence has softened. However, passenger demand is likely to remain well supported during the upcoming peak travel months of July and August”.