Highlights

  • Capa India predicts 200 aircraft grounding, impacting aviation operations.
  • Supply chain issues pose a risk to major airlines' operations.

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Capa India forecasts 200 aircraft grounding, fleet reduction issue looms

Capa India's forecast suggests the aviation sector could have nearly 790 aircraft by March 2024, with an operational count of just 588

Capa India forecasts 200 aircraft grounding, fleet reduction issue looms

Capa India's mid-year outlook suggests that around 200 aircraft of domestic airlines might face grounding, the potential grounding could significantly disrupt India's aviation industry, affecting operational capacities and potentially leading to substantial fleet reductions.

IndiGo, India's largest airline, could encounter the brunt of this downturn, with over 90 of its aircraft possibly grounded by March. Meanwhile, both Air India, backed by the Tata Group, and the budget carrier SpiceJet might witness 25-30 grounded planes each.

Moreover, Go First has already sidelined 54 aircraft since its flight suspension back in May, contributing to the current count of over 160 grounded aircraft across Indian airlines.

Notably, IndiGo has 55 aircraft currently grounded, according to CAPA – Centre for Aviation, hinting at the potential expansion of the grounded fleet size in the coming months.

Capa India's outlook indicates that the aviation sector might operate with a fleet size close to 790 aircraft by March 2024, out of which only 588 are expected to be operational. Additionally, the consultancy predicts possible delays in aircraft deliveries for Akasa Air, India's newest airline.

Regarding passenger traffic, Capa estimates approximately 155 million domestic and 70 million international passengers for the ongoing financial year. This marks a significant decrease compared to the 2022-23 statistics reported by the Airports Authority of India and Directorate General of Civil Aviation, which recorded 136 million domestic passengers and 57 million international passengers.

Capa India highlighted supply chain issues as a critical risk that could disrupt operations, potentially impacting the ability of major airlines to operate UDAN flights. The consultancy also anticipates the wet lease aircraft fleet in India to reach around 30 by March, as both IndiGo and SpiceJet plan to augment their capacity through this model.

Despite the capacity shortage, Capa observed a return to normalcy in airfares. While average fares dipped by 12.7% year-on-year in the September quarter, the consultancy forecasts a 3% yearly decrease in full-year yields. This projection may lead to higher losses for full-service carriers like Air India and Vistara than previously anticipated.

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