India’s aviation sector has seen a boom with an upswing in air travel, but there are issues like shortage of engine, non-availability of crew and grounded aircraft that remain to be tackled by the industry.
While announcing its outlook for 2023-24, CAPA India said that more than 100 planes of various Indian carriers are on the ground due to supply chain and non-supply chain issues. Nearly 110 aircraft or 15% of India’s total fleet across four airlines — Air India, SpiceJet, GoAir, IndiGo — are grounded for want of maintenance or engine replacements. “The impact of grounded aircraft is reflected on the financial performance of the airlines,” Kapil Kaul, CEO and director, CAPA India.
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Indian airlines are projected to record a consolidated loss of $1.6 to 1.8 billion in FY24, aviation consultancy CAPA India said on Monday. The full service carriers are expected to incur up to $1.2 billion in losses. Indian airlines are estimated to have a net induction of 132 planes next fiscal and will take the total fleet of all carriers to around 816 aircraft.
About a decade ago, India had only 14 million domestic passengers, which has now shot up to 144 million. Airlines are struggling to add more capacity which is leading to a spike in airfares. Most airlines are operating between 85-90% loads, which is beyond the usual level before fresh capacity is added by them.
Despite the rapid growth witnessed in the passenger traffic, its per capita penetration is still significantly low versus global average/ peers. India is at 0.13 seats deployed per capita (domestic air travel penetration) against 0.49 for China and 0.57 for Brazil, as per data compiled by the World Bank and Jeffries.
Supply chain issues, delay in deliveries of aircraft by the OEMs, crunch in pilot availability and also in cabin crew are likely to impede the expected supply in new capacity to meet the demand growth.
Indian scheduled operators are likely to require 10,900 additional pilots by FY30, according to CAPA India research and analysis. Aviation regulator Directorate General of Civil Aviation (DGCA) recently said that the country produces enough pilots every year. But Air India chief Campbell Wilson stated that the airline will have to depend on expatriates. He also said on Monday that Air India will reduce flights to some US routes — three flights each to San Francisco and Newark airports for the next three months — due to crew shortage.
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Indian airlines have about 1,200 aircraft on order, including the 470 placed by Air India and IndiGo’s 490. More orders are likely to be placed by the end of this year.
Meanwhile, speaking at the CAPA India Aviation Summit, civil aviation minister Jyotiraditya Scindia said the country built more airports in the last ten years than since the post-independence period prior to that. “Earlier airlines wanted people to fill the aircraft but today people want airlines to deploy more. This is an unprecedented growth. Even though the peak season is over, we are still experiencing between 4.2-4.4 lakh passengers per day in India,” Scindia said.