Friday, October 26, 2018

India airfares likely to fall more as IndiGo plans to expand fleet

Mumbai:  IndiGo's plans to add more aircraft to its fleet this year could push down fares further, casting a pall over the financial performance of the south Asian nation's struggling carriers.

The airline, backed by InterGlobe Aviation, on Wednesday reported its first quarterly loss since 2015 in July-September and said it will continue to expand capacity through this year by adding more aircraft.

The budget carrier, India's largest by market share, plans to increase capacity by 35% in the current quarter ending in December and 30% through the year that ends in March, Rohit Philip, the chief financial officer of InterGlobe, told analysts in a conference call. The expansion comes amid the increasing pace of delivery of Airbus A320 Neo jets that were previously held back due to problems with the Pratt &Whitney engines, Philip said.

"The need of the hour for the industry is lower capacity growth and higher fares. Instead, IndiGo is accelerating capacity addition," brokerage IIFL said in a report. "This would put further pressure on the industry."
25/10/18 Nikkei Asian Review

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