India’s domestic passenger load factor exceeded 90% for the first time ever in February 2018

The India domestic passenger load factor exceeded 90 per cent for the first time ever in February 2018, hitting an all-time high for the other global domestic markets, namely China, the US, Brazil, Russia, Japan and Australia. According to International Air Transport Association (IATA), the bigger picture is that the current load factor performance represents a significant turnaround from the early-2000s when India regularly posted the lowest domestic passenger load factor amongst its group of countries, even dipping below 50 per cent on occasion.
The evolution and maturity of India’s domestic air transport market can be illustrated by comparing the experiences around the time of 9/11 with that of late 2014. In the former, domestic capacity continued to increase even as demand slumped, while in late-2014 Indian airlines slowed capacity growth to support the load factor even as demand was growing strongly. In part, this appears to reflect the increasing influence of competitive (market) pressures over time via a mix of policy, regulatory and industry developments. Such forces have instilled a greater focus on airlines to achieve the load factor levels needed to generate adequate returns for their investors.

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