IndiGo, Spice expand fleet; Jet, AI, KF cut capacity

New Delhi: No-frills airlines IndiGo and SpiceJet are aggressively adding to their fleet while their full-service counterparts Air India, Kingfisher and Jet Airways are cutting capacity after tough couple of years, indicating a difference of opinion in the industry over future prospects.
The domestic airlines are estimated to have lost over $3 billion (Rs 14,000 crore) in the past two years mainly on account of sharp drop in demand growth, excess capacity, high fuel prices and at times irrational pricing by airlines to fill the excess capacity.
Delhi-based IndiGo has recently sought the government permission to import 10 Airbus 320 jets to be deployed on various domestic routes in the coming months. The airline recently launched Re 1 fare (exclusive of fuel surcharge and taxes) on several routes.
SpiceJet has submitted its application to import three B737s to the empowered committee on aircraft acquisition in the civil aviation ministry. The airline wants to add three more jets to its fleet by the end of next month.
After the financial crisis caused aviation growth to falter, state-owned Air India had decided to trim its fleet size to the extent of 30% to 105 jets by 2011. Kingfisher has already cut capacity reducing its fleet to 68 aircraft from 89 earlier. Besides deferring deliveries of aircraft, Jet Airways is negotiating with royal Brunei Airlines to lease out three B777s.
In the past nine months, all the three full-service carriers have put in additional seats by converting their two-class configured jet into single class. This way they have managed to keep their operational cost and fleet size same while adding capacity in the market.
The domestic air traffic has grown over 20% in the past few months, but on a low base of the past year. Demand is expected to soften in the coming lean season.
24/02/10 Nirbhay Kumar/Economic Times

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Categories: IndiGo Airlines Feb 2010, Jet Airways Feb 2010, Kingfisher Feb 2010, NACIL Feb 2010, spicejet Feb 2010