NEW DELHI: Even as SpiceJet and Indigo are aggressively expanding their fleets, they are unlikely to bridge the entire demand-supply gap created by the temporary grounding of Jet Airways.
According to a report by Elara Capital, domestic carriers would potentially add 150 aircraft during the financial year 2020. The fleet size of SpiceJet would be up by 45-50 aircraft, that of IndiGo by 50, GoAir by 10- 15, Air India by 25, and Vistara and AirAsia by 15.
The report, however, says that the net fleet addition in the domestic sector would be only 40 aircraft following the grounding of the Jet Airways fleet, SpiceJet’s grounding of its Boeing 737Max, and deployment of 10 aircraft on international operations.
“If we were to assume 10 per cent domestic demand growth, the net fleet addition requirement would be 50 for domestic operations, which implies the supply would lag demand and result in higher PLF and a consequent higher margin at INR 0.40/seat-km,” the report said.
Jet Airways, till last year, had a fleet of 119 aircraft, but since it started grounding its aircraft over non-payment of dues to lessors, the industry has faced severe capacity constrains, which have pushed up airfares. Now, many of its grounded planes have been leased by SpiceJet, which had to ground a dozen of its Boeing 737 Max planes over safety concerns.
Brokerage firm Prabhudas Lilladher expects these aircraft to be back in the air by the second quarter of 2019-20 after the manufacturer fixes software issues. The shortage in the number of seats offered by airlines also affected passenger traffic growth in March.