Home >News >India >Airlines not in a position to increase capacity to 45%

New Delhi: Indian airlines are unlikely to scale up their domestic capacity anytime soon to match the 45% cap set by the government, as they continue to be bogged down by sluggish demand, various restrictions, reduced slots at airports, and tough quarantine and lockdown rules imposed by states.

"It's hard for airlines to increase their capacity to 45% in the near future, as most airlines are currently operating at 20%-25% of their capacity amidst muted passenger demand due to the ongoing pandemic," said a senior airline official, requesting anonymity.

Indian airlines resumed domestic operations from 25 May, after being grounded for two months during a nationwide lockdown to contain the covid-19 pandemic. The government, however, set a 33% cap on the capacity while allowing them to restart operations, which was increased to 45% during June.

"Scaling up capacity to 45% is welcome given that economic resumption needs more deeper connectivity but demand remains very soft with continuing increase in infections especially in metropolitan cities," said Kapil Kaul, chief executive officer, Indian subcontinent and middle east at aviation advisory and consultancy firm CAPA India.

"It will be very challenging for the airlines," Kaul added.

India's largest airline InterGlobe Aviation Limited-operated IndiGo, which flies nearly one out of every two domestic passengers, hopes to be at an 85% operational capacity by June 2021, the airline's chief executive Ronojoy Dutta had told Mint last week.

"We believe that it may take anywhere between 18 -24 months to recover from the current situation to come back to the pre-covid levels of travel demand, also depending upon how other countries resume their international operations," Dutta had said.

Indian airlines have been currently operating just under 800 flights a day, from about 3000 flights a day before the pandemic-induced lockdown. However, airlines continue to cancel tickets on a daily basis, which have caused major disruptions to passengers.

Airlines cancelled as many as 10% to 12% of their flights everyday during the last week of June, said Nishant Pitti, chief executive and co-founder of online travel company EaseMyTrip.com.

The number of cancellations declined during the last week of June, Pitti added.

Cancelations are mainly due to three reasons, said a second airline executive.

"These include capacity cap from the regulatory authorities of 33% (now 45%), some airports still maintaining reduced slots (as against the 45% capacity cap and muted commercial demand or varying state government laws," said the official who didn't want to be quoted.

When contacted, airlines like Air India, IndiGo, SpiceJet, AirAsia India and GoAir didn't comment on the time frame they would require to increase capacity to 45% and the reasons for the high number of cancellations in June.

"Though the government has allowed airlines to increase capacity to 45%, there are still restrictions at various airports. Moreover, demand for air travel remains sluggish, especially with states imposing their respective rules," said a Vistara spokesperson.

Vistara currently operates about 40 daily flights up from 20 daily flights from 25 March.

"Unfortunately, we are having to implement a few ad-hoc cancellations regularly and there are also some frequent, planned capacity cuts, given low demand at present or because of varying state government rules," the Vistara spokesperson added.

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