Monday, December 10, 2018

IndiGo on top as low-cost carriers add most capacity

IndiGo, the low-cost carrier (LCC) and market leader in the Indian aviation space, was the biggest contributor in domestic capacity addition last week.

About 99% of airline seat capacity added last week was by LCCs, of which IndiGo accounted for close to 70%, according to an analysis by Australia-based aviation consultancy CAPA on the data released by OAG Aviation, a data intelligence company

The full-service carriers added only 1% capacity. Local carriers flew a total of 445,000 seats last week.
Further, Indian carriers crossed 40% share of international seat capacity to about 93,000 seats for the first time last week, again led by IndiGo.

"Increase in international capacity share is driven by Indian carrier expansion, led by IndiGo, which accounted for 57% of the total additional weekly seats, and 75% of additional seats by Indian carriers," CAPA said.

IndiGo last week became the first airline in India to have 200 aircraft in its fleet.

Its co-founder and interim CEO Rahul Bhatia during a second quarter result concall had announced that the carrier would add 30% capacity addition during the year. The push comes after aircraft manufacturer Airbus ramped up its production to meet the delivery deadlines. "We are well placed to take advantage of the growing market," Bhatia assured the analysts during the call.

The capacity addition comes as the aviation industry is facing several headwinds. IndiGo reported a loss of Rs 652 crore during the September quarter against a profit of Rs 551.6 crore a year ago. The airline management blamed the "unmaintainable" low fares due to competition, rising fuel prices, volatility in foreign exchange as the primary reasons for the loss, its first time since getting listed in November 2015. According to analysts, IndiGo's poor financial results are just an indicator of the tough phase the industry is going through.
10/12/18 Shahkar Abidi/DNA