Chocks-on at take-off: Why airline yields are in a tailspin despite boom

Domestic airlines are seeing unprecedented market growth, but rising fuel prices, weakening currency may make it tough for them to maximise gains

First the good news. India has become one of the world’s fastest-growing aviation markets: Domestic passenger traffic grew at 24 per cent in the first quarter of this year and airlines are adding aircraft to their fleets at a furious pace. 

Despite this boom, airlines are facing constricted margins and profits and dramatically falling yields. 

No carrier indicates the pressures more than IndiGo, India’s largest airline by market size and consistently one of the industry’s most profitable. Last week, IndiGo shocked the market with dismal fourth quarter results (January-March 2019), showing a precipitous 73 per cent drop in profit and