As India’s air traffic gradually stabilizes, a look at the different airlines’ fleets and aircraft utilization gives a very realistic picture of the ground reality.
- Exact as the threat of the new Omicron variant looms large and a little panic grips India, air traffic has remained better resilient than it did in earlier waves.
Industry sources revealed that while the traffic numbers in December have been more muted than usual even when compared to the last week of November, things were stable and not appearing at imminent risk of a collapse as of currently.
Since the reopening of domestic aviation in May 2020 after the initial two-month hiatus, the government has handled the number of flights airlines can work on domestic routes to control overheating of the sector.
Initially, the cap on the number of flights was 33% of the pre-pandemic schedule, and this was gradually improved to 80% till the second wave of Covid-19 hit. After that the government had reduced it to 50% and then relaxed it to 60%, 72.5%, 85%, and since October 2021, it has totally cleared the restrictions.
Directorate General of Civil Aviation
The airlines have gradually reintroduced aircraft and capacity. A total of 2,997 flights (including international) using 506 aircraft of the combined fleet of 658 aircraft as per the air operator’s certificate (AOC) were operated on December 22 by Indian airlines as per data by the Directorate General of Civil Aviation (DGCA). According to Ministry of Civil Aviation (MoCA) sources, when demand is high or not suppressed as at present, almost the entire fleet of 658 — give and take a rare— would be in benefit.
“The lower use of the fleet is either due to the lack of need and the players being wary of bringing in their total fleet or because some aircraft are not completely operational due to lack of spares or engineering related glitches”, told a top MoCA official on the condition of anonymity, adding that if demand was back to regular life, a minimum of 600 plus aircraft would be in active service.
The capacity to rebound for airlines is evident from two factors. One, how much of their existing capacity they are utilizing and to what extent. If for any airline, a substantial portion of the fleet remains grounded, it can be one of two reasons.
- One, the airline is unable to get some planes in aviation conditions due to a shortage of spares and parts, usually indicative of a tight liquidity position. Second, it could be underutilizing the fleet due to a perceived lack of need. No point getting all aircraft all dressed up with nowhere to go! Both factors — fleet utilization and the intensity of it — give a pretty good indication of how the carrier is managing post the Covid-19 crisis.
India’s total domestic traffic
A closer look at the individual airlines gives further insight on how the players are faring and coping post the two Covid-19 waves. As this went to press, the country’s largest airline IndiGo — which as per DGCA’s most delinquent http://www.goindigo.in/quarter market share data accounts for 57.1% of India’s total domestic traffic — had started utilizing its entire fleet of planes (280 in total, including 140 A320neos, 60 A320ceos, 46 A321neos, and 34 ATRs) although utilization was 12.5 hours instead of 13.5 hours a day.
To get to the more coveted 13.5 hours (airline economics is determined by the capacity to utilize one’s assets to the maximum), IndiGo needs scheduled international flight operations to normalize. Bubble flights and charters were using some of its available international ability but not quite enough, a top Indigo official approved.
Keeping IndiGo company in utilizing nearly its total fleet was the baby of the pack, AirAsia India with a market share of 4.9% (third quarter 2021) and a fleet of 28 planes, of which 27 are up in the air (one was undergoing C checks). It was however using its aircraft less than it was in the pre-Covid-19 era. That alone might partly explain the sharp rise in losses that the airline recently registered according to media reports: ₹1,532 crores for FY 2020-21 versus ₹732 crores for the previous year.
March 2022
The other airline in the Tata stable, Vistara, is now working at higher than Covid-19 levels in both ability and number of departures, with 52 aircraft in its current fleet which will be going up to 54 by the end of March 2022. The airline however declined to divulge specifics on average utilization.
It did limit its FY 2021 loss from the previous year but the jury is out on whether this was mostly on account of foreign exchange gains, a tighter rein on costs, or greater efficiencies all about.
The airline told that renegotiating with vendors and new avenues of payment like cargo and international charters allowed bolster its earnings. The comfort factor for the airline remains that the founders have not shied away from bringing in much-needed capital and supporting the airline’s head outside water.
SpiceJet, the third-largest in
- As per DGCA data accessed by this writer, the airline did 224 flights on December 22 using 45 of its 52 aircraft on AOC (air operator’s certificate).
SpiceJet, the third-largest in size and market share pre-pandemic has been rapidly shrinking (8.7% market share in the third quarter) and is now utilizing around 65-70 of its 95 aircraft with utilization hours claimed to be roughly the exact as pre-pandemic levels.
The airline has been financially and this is showing not just in the dues it has piled up but also in the urgency with which it is trying to replace its older B737s with the Max.
It has totted up book losses of ₹2,300 crores since the start of the pandemic (March 2020) which it is now trying to reduce through a series of initiatives.
Time will tell how successful it is
But one thing is clear: the rebound for SpiceJet as of now is not all easy and it is emerging more wounded than its better-capitalized rivals. As per DGCA data, on December 22, Mumbai-headquartered Go First did a sum of 271 flights using 46 of its aircraft from a fleet of 59 but aircraft utilization was not available as an email seeking the same from the company remained unanswered.
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Maybe the biggest loss or the one trailing most others in some sense remains Air India although this could adjust quite rapidly once the Tata Group takes control.
The airline went into the pandemic with a total fleet of 146 aircraft in total (121 aircraft in Air India and 25 B737-800NGs with Air India Express).
Air India’s narrow and wide-body aircraft
Nearly 18 of the Air India‘s narrow and wide-body aircraft fleet were grounded even pre-Covid-19 for one reason or the other.
Fifteen old A320Classic were awaiting deregistration by DGCA as per the EOI document given by the airline in January 2021, pre-sale. Sources expressed that Air India is nowadays utilizing only around 80 of its 121 aircraft — this includes about 50 narrowbodies (A320s) and 27-odd wide-body aircraft.
Air India standards are pretty good
The utilization formation ranges between 12-13 hours a day, which by Air India standards is pretty good. The airline denied an official statement but a few senior management sources told that more of the fleet would have been up and running if the airline had not faced a cash crunch and it could afford all the spares and expenses related to keeping the fleet in good shape. Post the final transfer to the Tatas — expected by the end of January — it is likely more of the fleet will be in shape to fly.
How much of the fleet it can immediately deploy will depend on a range of factors, not least of which is whether scheduled international operations normalize (as of now, this has been made to end January 2022).
Faring better than Air India is its low-cost arm, Air India Express. It has 24 aircraft up and running (one aircraft was grounded post the Calicut incident) and current aircraft utilization is around 12 hours on average. By summer, it hopes to touch 14 like pre-Covid-19.
As per DGCA data on December 22, Air India worked 77 aircraft and did a total of 330 flights (including international) out of a total fleet of 123 aircraft.
In other words, 46 aircraft were not used on the day, either due to the unavailability of the planes due to maintenance and spare issues or due to the lack of demand. Alliance Air however did 100 flights with 14 of its fleet of 18 aircraft, as per DGCA.
Looking at from a macro angle, the rebound of air traffic has been well good but air traffic growth that would have included had the pandemic not taken place has taken a hard beating.
At a micro level, the picture is as expected: some players have coped better and recovered speedier than others.
Analysts, experts, and observers say that as we head into 2022, the lessons learned from this extended episode are likely to stay and hopefully produce a more resilient industry for the fortune.
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