AirAsia India slows down capacity addition

The low-cost carrier had planned to induct six planes till Dec-end but now will add only two more this month that will increase its fleet size to four

AirAsia India is slowing down capacity addition and Vistara has deferred the induction of its third Airbus A320 aircraft due to regulatory uncertainty and delays in securing approvals, said aviation sources.

AirAsia India launched service in June and has two Airbus A320 planes. Originally it planned to induct six planes till December-end but now will add only two more this month increasing fleet size to four.

Vistara too has two A320 planes but it deferred the induction of its third plane as it is yet to receive an operating permit from the Directorate General of Civil Aviation.

"We have adjusted the induction of our next aircraft keeping in mind the delay in the approval process. This will, however, not impact our plan to have a fleet of five aircraft by March 2015," said a Vistara spokesperson.

A PTI report last month said Vistara will commence operations only next year because of delay in securing the permit.

A source familiar with AirAsia's plans said the capacity addition is slow as the airline is awaiting clarity from the government on policy revision regarding international flights and route dispersal guidelines which mandates certain% on capacity to tier II and III cities.

The source added AirAsia will induct two planes this month and additional 8-10 planes in next year. AirAsia started its domestic operations with a Bangalore-Goa flight and flies to Chennai, Kochi, Chadigarh and Jaipur. It will launch Bangalore- Pune flight later this month. The airline had initially said it will not fly to Delhi and Mumbai because of high airport charges but now will be flying from both the cities.

According to a Centre for Asia Pacific Aviation (CAPA) report domestic airlines are expected to add 26 planes in the current fiscal.

"Domestic capacity is projected to grow by 8-10% in FY2015 and will largely be driven by IndiGo and start-up carriers. IndiGo is expected to deploy six A320s in the domestic market between April 2014 and March 2015. AirAsia India, which launched with one Airbus A320 in Jun-2014, is likely to reach a fleet size of five to six aircraft by Mar-2015.

Vistara may have about five aircraft in operation by the end of FY2015. However, the final number of aircraft may vary as Air Asia India's plans are subject to change, while Vistara's growth is dependent on the timing of its launch,'' CAPA said in its report.

Domestic air traffic grew by over 18% in October compared to same month boosted by festive season travel demand. Indian carriers flew over 5.9 million passengers last month up 5 million in last October.