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SpiceJet's resurgence could disrupt Indian aviation market: Capa

Last updated on: December 29, 2023 14:13 IST

SpiceJet’s resurgence, once the new funding is in place, has the potential to disrupt the Indian aviation market in 2024 as the airline will bring its grounded aircraft back to service and lease as many planes as possible to be competitively relevant, aviation consultancy firm Capa India said on Thursday.

SpiceJet

Photograph: Amit Dave/Reuters

“Although the market for procuring aircraft in 2024 is exceptionally tight, we expect that SpiceJet will bring stored aircraft back into operations, and will wet or dry lease as much capacity as possible, in order to be competitively relevant.

"This will have a material impact on the industry structure, and possibly on domestic profitability,” Capa India said in its report.

 

SpiceJet currently has about 66 planes in its fleet.

About 40 planes out of 66 are in active service and the rest are grounded.

The consultancy firm said that if SpiceJet goes for organic expansion by placing orders with aircraft makers, it would take two to three years.

“Although contemplating such a scenario may be premature at present, if they’re successful it may lead to SpiceJet transitioning to an all-Airbus fleet in the near term,” it added.

Capa India said that IndiGo will continue to maintain its dominance of the domestic market in 2024 despite the capacity challenges.

IndiGo had announced last month that it will ground about 35 more planes in the early part of 2024 due to a new issue in Pratt & Whitney engines.

IndiGo will mitigate supply chain and other issues by securing alternative capacity, to ensure that expansion plans, capacity guidance and strategic targets are met, Capa India noted.

"IndiGo's ability to secure replacement capacity on a timely basis will be a key issue to track (in 2024).

"The debut of the carrier's business class will be another important strategic development in 2024, especially its product features," it added.

Air India's first six A350 aircraft are expected to be deployed on international routes from summer 2024, joining 5 B777 aircraft already released from Delta Airlines, and other B777s leased and yet to come from Etihad Airlines and Singapore Airlines.

"This will result in a significantly upgraded long and ultra long haul product and customer experience (at Air India).

"Product standardisation across the fleet will take at least a couple of years, but service standardisation will start to become visible from 2024," CAPA India mentioned.

Deepak Patel
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