With extreme demand, the airline industry should experience great expansion, say executives

India’s biggest airline industry, IndiGo, stated the business is starting its next phase of expansion With extreme demand and would substantially spend to enhance domestic capacity despite the market being congested.

Notwithstanding its hurdles, the potential of the Indian market would continue to stay strong, according to senior executives of airlines.

“The Indian market has been one of the fastest to recover from the impact of the pandemic and we are witnessing continuous robust demand from consumers. The Indian market is a sweet spot to be in,” chief executive Pieter Elbers said.

The airline industry, which hopes to have 100 million passengers by the end of the next fiscal year, said its expansion plans would have been more ambitious without the supply chain limitation. Elbers said IndiGo is extending leases of many planes to sustain capacity development. Elbers and other airline executives were speaking at an event arranged by aviation consultant CAPA India.

India is likely to have 350 million domestic and 160 million foreign fliers by FY30, CAPA stated on Monday. However, it emphasized that the introduction of capacity must be in pace with demand as excess capacity may generate structural issues. It also claimed that the dearth of educated people including pilots, engineers, and air traffic controllers may harm expansion.

A scarcity of pilots and cabin personnel has prompted Air India to curtail six flights per week to the US, the Tata Sons-owned airline’s CEO, Campbell Wilson, said. The airline will cease three flights each to San Francisco and Newark airports for the next three months.

Nonetheless, Akasa Air CEO Vinay Dube stated he hasn’t experienced any difficulties of pilot scarcity. “They make a fuss out of pilot scarcity. Yet 3,000-3,500 pilot permits were given from 2019-22. Most of them haven’t found work as of today. We have had a boatload of pilot applications, more than we can hire,” Dube said, adding that he doesn’t believe the airline business is saturated in India. 

“We believe that India as a market can accommodate anyone, the concentration of the US market is 70% and is concentrated with two carriers. Yet one of the most successful airlines has been Alaska,” he remarked, on being questioned about room for a third airline after IndiGo and Tata-owned airlines in India.

Ajay Singh, CEO of SpiceJet, said he expects record yields and passenger traffic in the summer of 2023. “Over the next two quarters, SpiceJet’s balance sheet will improve significantly. The fact that Indian airlines survived the pandemic without a bailout by the government is a testimony of the resilience of the industry in the country,” Singh said.

Sanjay Kumar, former chief strategy and revenue officer of IndiGo, said he thinks that despite the enormous aircraft orders, the Indian airline industry still has the capacity for two additional carriers with 150 aircraft.