After soaring to 30.8% in September, the pace of increase in domestic air passengers slowed in October, with the month registering a year-on-year (YoY) growth of 26.7%, data put out by the Directorate General of Civil Aviation (DGCA) on Thursday showed.
Industry experts said the pace of growth may have slowed down because airlines have increased fares in their bid to improve yields, or the net revenue per seat. Over the last few quarters, airline yields have been hovering at very low levels, making it difficult for them to move out of the red.

"All carriers have been hiking fares since the second week of October and the impact of it can be seen in the declining growth in that month. This goes to prove that demand in the Indian market is very price elastic. The moment airlines try to improve yields, there is an immediate impact on demand," said an airline source, who did not want to be named.
He said domestic fares have climbed an average 15-18% since the second week of October.

At 40.29 lakh, the number of travellers who took to the air in October was 8.49 lakh more than the number last year.

For the first ten months of calendar 2009, the number of domestic fliers grew 3.32% year on year to 360 lakh.

One of the players -- New Delhi-based regional carrier MDLR Airlines -- suspended operations in the first week of October.

State-owned Air India and Jet Airways, which had lost substantial market share in September due to pilot strikes, made up in October, with their shares jumping increasing to 18.6% and 19.8% from 17.5% and 15.8%, respectively in September.

JetLite also improved its share to 7.9% from 7.7% during the same period. All the other airlines -- Kingfisher Airlines, SpiceJet, Paramount Airways, GoAir and IndiGo -- saw their market shares dip. Interestingly, even though the market shares of SpiceJet, GoAir and IndiGo slipped in October, they flew more passengers in that month compared with September. Naresh Goyal owned Jet Airways and JetLite maintained market leadership in terms of the number of passengers carried with a 27.7% share, followed by Kingfisher Airlines, whose share was 23.3%. The average load factor of all airlines improved in October compared with September as leisure travellers jumped on board due to the festive and holiday season. Except for Kingfisher, SpiceJet and IndiGo, all other carriers improved their load factors month-on-month.

The industry's cancellation rate, which had deteriorated to 6.6% in September because of the pilot strikes at Air India and Jet Airways, improved in October to 1.6%. GoAir had the best cancellation rate at 0.1%.

In terms of on-time-performance (OTP), the airlines fared badly, with overall industry OTP dropping to 75% from 82.9% in September. IndiGo snatched the top position from Paramount Airways with an OTP rate of 88.5%. Paramount slipped to the second position as it registered an OTP rate of 87.4%.