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India's airline fleet to contract, fall below 700 on weak demand: CAPA

Reuters | Updated on July 09, 2021

The carriers are expected to lose $4.1 billion in the current fiscal year

India's airline fleet is expected to contract by 15 to 20 aircraft to less than 700 in the current fiscal year through March 2022, as carriers retire more planes than they induct due to weak passenger demand, consultant CAPA said.

Indian airlines are expected to induct 69 planes during the year and retire 86 aircraft, some of which could be through repossessions by lessors, CAPA said during a web conference on its outlook for the country's aviation sector.

Covid surge

Airlines will also be forced to ground 250-300 planes in the first half of the current fiscal year, CAPA estimates, as a surge in Covid-19 infections in the South Asian nation earlier this year roils air travel.

Indian carriers are expected to lose $4.1 billion in the current fiscal year on top of a similar loss last year, CAPA estimates, putting renewed pressure on them to raise cash or face the risk of having to downsize, consolidate or have their planes repossessed by lessors.

"Many operators will struggle to recover from two consecutive years of such massive losses," CAPA's India head Kapil Kaul said.

Even as new infections in India are falling, the pace of vaccinations has been slow with only about 5% of adults fully inoculated which could delay a recovery, analysts say.

Domestic air traffic is expected to rebound this year -rising 51% over last year but it will still be well below pre-Covid-19 levels. International air travel is expected to take longer to recover, CAPA said.

Published on June 25, 2021

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