Indian aviation is booming. This is on the backdrop of capacity increase by all airlines which is happening at a tremendous pace. IndiGo is leading the pack and is the first airline in India to boast a 200+ aircraft fleet. Airlines in India took deliveries at the rate of more than 1 aircraft every 3 days.
If you look at the table, aircraft deliveries in the first half of the year were hampered by productions issues with the A320neo P&W engines. Since IndiGo and GoAir are the only two Indian carriers with a large order for the A320neo aircraft with the P&W engines, delivery was significantly affected.
IndiGo mitigated this by leasing older A320ceo aircraft from the market for a short-term lease. They returned 4 A320ceo in May 2018 which they took on wet lease in December 2017 for around six months from Small Planet Airlines. IndiGo had started returning ex TigerAir/Scoot A320ceo in 2017. They further returned 8 more A320ceo to Scoot in 2018.
Here is an overall tally for the various airlines in India, which added aircraft in 2018.
On the Boeing 737 Max front, both SpiceJet and Jet Airways took their first Boeing 737 Max 8 in the second half of the year. SpiceJet more than doubled its Boeing 737 Max fleet in December alone. SpiceJet was also the launch customer for the 90-seat Dash-8 Q400.
Only IndiGo returned 8 aircraft in 2018. Excluding the four wet-leased aircraft returned by IndiGo and two wet-leased aircraft returned by SpiceJet, the net addition stands at 123 aircraft in 2018.
Moving forward in 2019 we will see further capacity addition with LCCs dominating again:
- IndiGo: Overall deliveries may marginally increase. Expect an increase in A321neo deliveries. ATR 72 deliveries may slow down since there are not enough pilots with IndiGo to operate them. We will get more clarification in the next Earnings call.
- SpiceJet and GoAir: No exact delivery schedule but expect a better growth rate compared to 2018.
- Jet Airways: Another 6 737 Max 8 are scheduled to join the fleet by March but no information on delivery schedule post that. Jet Airways has started retiring its Atr 72 fleet.
- Vistara: A320neo and A321neo will start coming in from second half of the year. There is a slight chance that 1 Boeing 787-9 may come at the end of 2019.
- Air India: They only have 5 more A320neo left for delivery from the previous order. No more A320neo ordered.
- AirAsia India: Frankly speaking no clue at all. I think we may see a concrete plan from AirAsia India this year since the management rejig.
With all the new planes being added, it then makes a lot of sense for airlines to continue to add new routes to keep these aircraft in the air.
What are your thoughts regarding airlines pursuing capacity addition in 2019?