Indian Low Cost Airlines Shows Growth

Monday, 14th January 2013 at 01:20am

In the most recent 2012 global ranking, India's low-cost airlines, IndiGo and SpiceJet, grew by 34.6% and 16%, respectively, in terms of capacity. This is in stark contrast to their full-service counterparts, Air India and Jet Airways, who were seen downsizing operations over the same period.

The global ranking is published annually by Centre for Aviation to make comparative analysis on the world's airlines' progress or the lack of it over a given period. For 2012, IndiGo climbed three notches higher to 11th place from its 14th place in 2011 as the world's largest low-cost carrier, increasing its available seat kilometers (ASK) to 489m in 2012 per week from 363m in 2011. SpiceJet, meanwhile, improved its 2012 ranking to19th registering 313m ASK weekly.

According to IndiGo president, Aditya Ghosh, the airline would be adding 100 aircraft to its fleet over a ten-year period from 2005 to 2015. He also said that India has one of the world's lowest aircraft penetration per million inhabitants which makes it more conducive for airlines to expand their fleet. As a point of comparison, Indonesia and the Philippines have three or four times higher aircraft density than in India.

The ranking of India's full-service carriers over the same period went down. Jet Airways trimmed its ASK by 11% to 682m per week in 2012, falling seven notches lower over the same period in 2011. Air India, on the other hand, fell to 35th place or one place lower than its 2011 ranking, as a result of cutting off 3.1% of its capacity last year.

Air India is the country's oldest and the biggest commercial airline operator but its market share has been dwindling over the last decades, falling to 20.7% today. IndiGo's current market share of 27.3% is quite impressive for a comparatively new airline, which began operation only in 2006. Compared to India's existing airline operators, IndiGo has the lowest rate in terms of flight cancellations and the fewest passenger complaints.

As explained by aviation analyst, Sharan Lillaney, the changes in capacity mirror the duration between profitability and volume growth. He said that the two airlines increased their respective fleets in the past and they won't return to growth until they find profitability in their operations.

He also clarified that any airline can add capacity to its existing network by taking in new aircraft through leasing but that doesn't translate to profitability. Jet, for example, withholds expansion until they become profitable. The Indian government has advised Air India the same.

IndiGo's Ghosh disclosed that the airline had been profitable for the past 4 years while SpiceJet was losing Rs1.6 billion for the fiscal period 2011-2012 but not after being profitable by Rs.3.7 billion in the preceding period. Jet made a similar pattern having made profits of Rs96.9 million for the 2011-2012 period only to succumb to a huge loss of Rs.12.4B last year.

By: .

Cheap Flight Search

Depart From:
Arrive At:
Departure Date:
Return Date:
Currency:
Passengers:

Sign up for the India Flights updates!

For all the latest news on India flights 'like' us now:

Skypicker banner