Rising income, not low-cost, boosting air traffic in India: IATA

The International Air Transport Association (IATA) has said that the growth in air passenger traffic across India is primarily due to rising income levels of people, and not because of low-cost carriers (LCCs).

No-frills carriers have put in additional seat capacity which has pulled down air fares across the board. Lower fares have a chance of stimulating the market and that is what happening in India, said Brian Pearce, chief economist of IATA.

He further added that some consolidation in the airline industry will cut seat capacity in the short to medium term, which is pushing yields (revenue per seat) down now.

In calendar year 2006, the number of domestic air passengers is likely to reach 64 million passengers while the number of international passengers will move up to 27 million.

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