India’s largest airline, IndiGo, said the carrier is entering its next phase of growth and will heavily invest to increase domestic capacity despite the market being crowded.
“The Indian market has been one of the fastest to recover from the impact of the pandemic and we are witnessing continuous robust demand from consumers. The Indian market is a sweet spot to be in,” chief executive Pieter Elbers said.
The airline, which expects to have 100 million customers by the end of the next fiscal year, said its growth plans would have been more aggressive without the supply chain constraint. Elbers said IndiGo is extending leases of multiple aircraft in order to maintain capacity growth.
Elbers and other airline executives were speaking at an event organised by aviation consultancy CAPA India.
India is projected to see 350 million domestic and 160 million international flyers by FY30, CAPA said on Monday. But it warned that the induction of capacity must be in sync with demand as excess capacity may create structural challenges. It also said that shortage of trained manpower like pilots, engineers and air traffic controllers may hurt growth. A shortage of pilots and cabin crew has forced Air India to cut six flights week to the US, the Tata Sons-owned airline’s CEO, Campbell Wilson, said. The carrier will stop three flights each to San Francisco and Newark airports for the next three months.
However, Akasa Air CEO Vinay Dube said he hasn’t faced any challenges of pilot shortage. “People make a deal out of pilot shortage. But 3,000-3,500 pilot licences were issued from 2019-22. Most of them haven’t found jobs as of now. We have got a tonne of pilot applications, more than we can recruit,” Dube said, adding that he doesn’t think the airline market is saturated in India. “We think that India as a market can accommodate everybody, the concentration of the US market is 70% and is consolidated with two airlines. But one of the most successful airlines has been Alaska,” he said, on being asked about space for a third airline after IndiGo and Tata-owned airlines in India.Ajay Singh, CEO of SpiceJet, said he expects record yields and passenger traffic in the summer of 2023. “Over the next two quarters, SpiceJet‘s balance sheet will improve significantly. The fact that Indian airlines survived the pandemic without a bailout by the government is a testimony of the resilience of the aviation industry in the country,” Singh said.
Sanjay Kumar, former chief strategy and revenue officer of IndiGo, said he feels that despite the massive aircraft orders, the Indian market still has space for two more airlines with 150 aircraft. “If we look at the next 5-10 years, India will need at least 1,500 aircraft to cater to the growing demand. Around 1,000 aircraft will be operated between IndiGo & the Tata group, and there will still be space for 2-3 airlines with up to 150 aircraft each,” Kumar said.
