Cash ban didn’t stop air travel in November-December period

The ban on specified bank notes (SBN) in the last two months of 2016 did not dent air travel as passengers carried by domestic airlines recorded higher growth rate in the months preceding demonetisation and even in January of 25.13%.

Domestic airlines carried 86.72 lakh passengers in October, 89.66 lakh in November, 95.52 lakh in December 2016 and 95.79 lakhs in January 2017, as per the data given by Directorate General of Civil Aviation (DGCA).

The last month of the year recorded the highest passengers aboard domestic planes in the year.

Passengers carried by domestic airlines in January to October period and the two succeeding months after that was recorded at an uptrend of 23.18%, 23.10% and 23.18% respectively higher than the corresponding period of the previous year.

“Dec'16 betters the Nov'16 record of highest number of passengers in a month and records 23.9% growth. No demonetization slowdown,” Aviation Minister Ashok Gajapathi Raju tweeted on January 17.

Dec'16 betters the Nov'16 record of highest number of passengers in a month and records 23.9% growth. No demonetization slowdown. pic.twitter.com/Ygs0lmVjbs

— Ashok Gajapathi Raju (@Ashok_Gajapathi) January 17, 2017

Even the passenger load factor which measured the capacity utilization of the airlines was largely unchanged for October, November and December.

In November and December when demonetisation was prevailing it was n
oticed that airlines had higher passenger load fax compared to the previous months.

Image Source: DGCA report

Image Source: DGCA report

The cancellation rates in these months was increasing steadily.

Cancellation rates in the month of October was 0.72% while in November it increased to 1.17% and in December it was up 2.18%, which was the highest in the whole year.  However, the cancellation rate in December 2015 was also 2.49%.

In the month of January 2017 it reduced to 1.10% the same rate as January 2016.

On November 8, PM Modi announced the demonetisation of higher denomination currency in a move to curb black money. Industry experts were predicting a major impact on this sector due to the unavailability of free flowing cash.