Budget carrier AirAsia India is planning to take its fleet strength to 30 by end of the year from the current 21 as it looks to expand its domestic network.
A senior airline executive said the airline is planning to lease nine narrow-body Airbus A320 in the next six months to serve key markets like Mumbai and Delhi in the wake of Jet Airways’ grounding.
The airline, a joint venture between Tata Sons and Malaysia-based AirAsia Berhad, received eight slots at Mumbai airport that were earlier operated by Jet.
“There is an impetus for stabilising operations and expand network at major markets amid reduced overall capacities. We have added a couple of aircraft since Jet’s closure. We would add nine A320s by the end of December,” the executive told FE.
AirAsia has gained 40 bps to 6.3% between March and May mainly on account of Jet’s grounding from April 17. Low-cost carrier SpiceJet has been aggressively adding aircraft to operate on Jet’s vacant routes. It has inducted over 30 aircraft, earlier flown by the full-service carrier.
According to aviation consultancy firm Capa India, around 800 weekly slots have become available in Delhi and Mumbai alone, creating opportunities for airlines to increase their presence in these important markets.
“More than 35 million seats have been taken out of the system, resulting in more balanced demand/supply dynamics, which should improve yields significantly,” Capa India noted.
AirAsia has been awaiting civil aviation ministry’s nod for international operations since January. The carrier’s overseas permit is held up due to ongoing investigations into alleged lobbying for change in government’s foreign flying norms for domestic carriers. This relates to scrapping of 5/20 rule in June 2016.
“We are expecting to hear on it (overseas flying permit) soon. We plan to start overseas operations this year,” the executive added.
Analysts believe the grounding of Jet Airways has moderated domestic capacities thereby improving yields of all carriers.
“Near-term yield trends will continue to be quite encouraging because of deceleration in capacity growth owing to Jet’s shutdown, and aircraft and crew availability issues,” brokerage firm Edelweiss Securities pointed out.
Domestic passenger traffic growth rebound during May to 3% year-on-year (y-o-y) after slipping into negative in April 2019.
