Thursday, June 01, 2017

Overcapacity to further hit airlines’ profitability in FY18

Mumbai: Unprecedented capacity expansion by Indian carriers to match the aggressive growth agenda of IndiGo would push airlines towards reduced profits and larger losses in FY2018 due to pressure on yields on account of offer of low fares, Centre for Asia Pacific Aviation (CAPA), the aviation think tank has said.

“IndiGo’s increasingly aggressive and unprecedented growth is creating a strategic compulsion for others to expand to remain relevant in the market. This is driving over-capacity and increasing industry risks for most carriers,” CAPA said in its outlook for 2018.

IndiGo has the largest fleet of 135 aircraft, and the largest order book of any airline in the world at 458 aircraft. Its fleet could expand by 46 aircraft during this financial year.

Besides, the airline has announced an order for 50 ATR-72s and possibility order A330neos for long haul services.
31/05/17 Lalatendu Mishra/The Hindu