New Delhi: The high prices of aviation turbine fuel and the financial turmoil in the world economy which has finally started to impact India has been cited as the main cause of domestic air hitting a five-year low.
Domestic air traffic dropped 19 per cent during September 2008, marking the fourth successive month of shrinking air traffic. Consequently, airlines have started to implement cost cutting and downsizing plans, as almost all of the domestic carriers witnessed their load factors decline during September 2008.
With no end to the crisis in sight, airlines have hastened their route rationalizations, and have also started to return aircraft that they had leased just a year ago when the going was good.
A day after India's top two private sector airlines announced massive job cuts, involving around 2,000 employees, state-run Air-India said it was open to letting as many as 15,000 of its staff go on leave without pay for 3-5 years, but on a purely voluntary basis.
Jet Airways said Wednesday that 1,900 of the airline's13,000 staff were being given termination notices. The number has more than doubled from the 850 announced yesterday. The move by India's largest private carrier to jettison staff at such massive levels has been initiated almost immediately after arriving at an understanding with rival Kingfisher Airlines over operational synergies. After affecting the largest lay off ever in Indian aviation history, Jet Airways staged a complete about turn reversing its decision to sack 1,900 employees. The decision to reverse the lay-offs was announced by chairman Naresh Goyal at a hastily convened press conference at the company's Mumbai headquarters at around 11.30 pm on 16 October.
Industry sources say that Kingfisher Red, the former Air Deccan, was amongst the biggest losers of load factors, dropping almost a fifth of its load factor in September. Air India's load factor is reported to have dropped by 10 per cent, to 53 per cent in September, meaning that a little over half its flights have people sitting on seats. Reports suggest that the average load factor of airlines is down to 55 per cent for the month of September 2008, against more than 65 per cent in September 2007.
Domestic airlines flew around 2.6 million passengers in September 2008, against roughly 3.3 million in September 2007. Average flight movements have come below 8,000 per week, say reports, from a peak of approximately 10,500 during the April-June period.