The interim but indefinite suspension of Jet Airways has left a large void but the situation is likely to normalise in domestic space as airlines are adding 51-66 more aircraft than their planned induction for the current financial year, according to aviation advisory firm CAPA.
"SpiceJet, Vistara and AirAsia India are accelerating fleet expansion by 51-66 aircraft above their original plan for FY20. SpiceJet will account for 30-40 of them. This should restore loss of Jet’s domestic capacity by September 2019," CAPA India said.
Further, the aviation advisory and research firm also expects Indian carriers to induct 134-151 aircraft in 2019-20 (Apr-Mar) but on a net level, the operating fleet will only increase by 19-36 aircraft as much of the addition will compensate for the loss of Jet Airways' capacity from the market.
Overall, CAPA expects the domestic traffic growth to be muted in 2019-20 (Apr-Mar) at less than 5 percent on year with traffic declining in the first half but to be offset by the resumption of 5-8 percent growth from October onwards. It has also warned that the rosy phase of high double-digit growth rates which was observed during the last five years is unlikely to return in the near term.
The overall fleet size of Indian low-cost carriers, which largely include all carriers other than Vistara and Air India, is likely to cross 500 in the current year from around 400 currently.
"Another large narrowbody and widebody order is expected in next 12 months," CAPA said. It is important to recall here that both IndiGo and SpiceJet have said in the recent past that they are evaluating the wide-bodied aircraft model. Currently, they operate a fleet of narrow-bodied aircraft and turboprops.
On the international level, Jet Airways' interim closure is likely to have a significant impact as the airline was the largest player in this segment.
"International traffic growth in the current financial year likely to be flat at best, and could decline slightly by up to 5 percent, despite the acceleration of overseas expansion by Indian carriers, and increased capacity by some foreign carriers. Growth is expected to resume from FY21," CAPA said.
With an available opportunity of gaining a substantial pie of Jet's international market, IndiGo, SpiceJet and GoAir will increase their focus overseas, CAPA said, adding that Indian low-cost carriers are expected to deploy 40 additional narrowbodies on regional international routes in the current financial year.
"In the race to fill the space left by Jet Airways, decisions on some new routes may be rushed. As a result, there are likely to be changes and adjustments to international routes until the network settles down," CAPA said.
The initial international expansion by the low-cost carriers will be on routes of up to 5-6 hours, within the non-stop range of re-engined narrowbodies. However, one-stop narrowbody services to Europe (via Central Asia) are expected to launch shortly, and long haul non-stop services on widebodies will follow, possibly before the end of FY2020, or in FY2021, CAPA said in its quarterly market insights for April-June for the Indian market.
"The closure of Jet Airways has positively transformed market dynamics for Indian carriers. FY2020 could mark a positive turning point for the sector," CAPA said.
First Published: Jun 6, 2019 8:04 PM IST
