Air India`s budget airline head expects capacity growth to outpace demand
The head of Air India Express said on Friday that the increased capacity Indian carriers expect to add in coming years will outpace demand, which may potentially bring down ticket prices, as the airline industry comes under criticism for rising fares.
India's domestic air travel sector is among the fastest growing in the world. But IndiGo and Air India Group, which includes the namesake full-service airline and budget unit Air India Express, control about 90% of the market.
Criticism around rising fares has been growing. Earlier this year, India's aviation regulator, the Directorate General of Civil Aviation (DGCA), was forced to step in and ask airlines to cut fares after prices soared during the Hindu Maha Kumbh festival.
"The capacity that we expect coming into the market, not just over the next year, but over the next several years, in all probability, will stay ahead of the demand," Managing Director Aloke Singh told reporters, when asked about airfare concerns.
His comments come days after an Indian parliament committee recommended giving the DGCA the power to regulate airfares, currently based on demand and supply considerations.
Indian airlines are expected to add 96 aircraft to their fleet this calendar year, according to data from consultancy Cirium Ascend, slightly less than in the previous two years.
Express will add about 15 aircraft to its fleet in the next fiscal year, which begins on April 1, with some procured from Air India, Singh said. It is also working on a "long-term" fleet plan, he said, without elaborating.
Capacity should rise by about 45% next year, enabling the airline to carry an average of 2.5 million passengers per month, up from 2 million passengers the previous year, Singh said.
Express added about 37 planes last year, consisting of Boeing's 737 MAX jets and Airbus A320neo and A320ceo aircraft.
The company plans to complete the addition of economy class seats to its aircraft by the beginning of fiscal year 2027, Singh said.
The carrier is also looking to deepen arrangements with international low-cost airlines Scoot, Jazeera Airways and Air Arabia, among others, allowing passengers more options.
