Air travel in India faces turbulence next year

India’s booming air passenger traffic might encounter turbulence next year, aircraft fleet projections of aviation consultant Capa showed.  By March next year, Capa estimates that the number of grounded aircraft due to worsening supply chain issues will exceed 200, up from the nearly 150 planes currently. The grounding of aircraft next year will coincide with a 15% surge in air passenger traffic in India to 155 million, Capa said. Out of the projected 789 aircraft fleet set to be registered with the four Indian airlines, about 588 are expected to be operational.

To address the challenge, airlines such as IndiGo and SpiceJet are turning to wet leasing, with up to 30 wet-leased planes set to operate in India by March next year. In a wet lease arrangement, one airline (the lessor) provides another airline (the lessee) with not only the aircraft but also the crew, maintenance, insurance, and other operational services.

Meanwhile, the increase in grounded aircraft is causing a shortage of parking space, affecting hangars and operations across the country, with potential for further challenges if grounding escalates.

CAPA’s report warns that supply chain problems could have a more significant impact than expected, affecting the ability of mainline scheduled airlines to operate UDAN flights. UDAN is the Indian government’s regional connectivity scheme (RCS), aimed at enhancing air connectivity to underserved and remote regions.

The Indian aviation sector is projected to incur a loss of $1.6-1.8 billion, with full-service airlines expected to bear $1.4-1.5 billion of the total, and no-frills carriers the rest.

Despite facing challenges related to Pratt and Whitney engines, IndiGo is forecasted to achieve a profit of $500 million, bolstering its cash reserves by about $1.2 billion. The Air India group plans to add 60 aircraft, including 30 for Air India, 20 for Air India Express, and over 10 for Vistara, the Capa report said.