Indian carriers will induct one aircraft every alternate day in the remaining months of the year to boost capacity in anticipation of record demand in the upcoming travel season.
The expansion plan of each airline, without being fully subjected to availability of pilots to fly the aircraft, is to double down the efforts for aircraft procurement even if it includes paying steeper lease rentals.
At least 60 aircraft by five airlines are set to be inducted and pressed into service between now and end of FY24, which will not only bring in incremental capacity, but will take care of fresh cases of aircraft groundings and to fill up the void created by Go First.
“Almost every week we have a new plane coming in and that is for the entire year,” Pieter Elbers, CEO, IndiGo said in a post earning call.
IndiGo, which is India’s largest airline, re-inducted 36 aircraft, executed damp leases of two wide bodies and damp leases of 11 additional aircraft starting operations from November. The airline inducted 6 aircraft every month during the July-September quarter.
Additionally, it is executing leases for 12 additional Airbus A320ceos from the secondary (used) market with deliveries expected from January 2024 onwards. Since demand is outstripping supply, lease rentals are heading north.
“Lease cost, especially for the secondary planes, has seen an increase in the rent given the surge in demand and short supplies. We are looking at additional A320ceo aircraft but potentially are going to be a little more expensive,” Gaurav Negi, chief financial officer, IndiGo.
With cash reserves of over Rs 30,000 crore, IndiGo is planning to make direct purchases of aircraft and engines. The company plans to start with the 30 to 78-seater ATRs.
“We are looking at purchases in the coming quarters where we would be utilising our own capital. From a long-term standpoint, we will be looking at engines (that) we procure on a cash basis too,” Negi said.
Air India, along with Air India Express will induct 30 aircraft before the end of FY24, making it one every six days. Vistara, the second largest carrier, is scheduled to receive around 5 planes in the remaining part of the year.
Akasa Air, the low-cost airline, which was adversely hit by pilot shortages in recent months, has put the disruption behind it and is set to increase its fleet by 25% by the end of FY24.
In a recent interaction with FE, Vinay Dube, founder and CEO, Akasa Air said, “We will exit March (2024) with about 25 aircraft and we should be 40 planes by the ensuing March.”
Despite the absence of nearly 1,600 departures of that of Go First every week, the winter schedule that became effective from October 29, will have 8% more flights per week compared to the winter schedule of last year and 4% more than the summer schedule of this year.
The October to December quarter, which is also the strongest quarter in a year for airlines, hotels and travel companies, is already witnessing strong trends of forward bookings.
Speaking to FE, Mahesh Iyer, managing director and CEO, Thomas Cook, “For the October to December period, our forward booking numbers are 32% higher than the same quarter last year.”
