Aided by high seat factor,IndiGo tops in capacity addition

India's largest passenger carrier IndiGo,whose market share reached nearly 30% in April.

Indias largest passenger carrier IndiGo,whose market share reached nearly 30% in April,is also leading in terms of capacity addition. The carriers ASKMs (available seat kilometres),a measure of capacity in the airline industry,grew 25% year-on-year during January-March 2013 to 5.5 million,even as industry wide ASKMs declined 4% to 18.83 million.

The Delhi-based budget carrier that has 260 Airbus A320s on order has received 78 planes till now and in the first three months of the year added six more planes to its line up.

IndiGo is also the leader in the industry in terms of ASKMs. Rivals Jet Airways along with Jet Konnect are second with ASKMs of 4.48 million during January-March 2013,falling 8% year-on-year,as per data from the DGCA.

IndiGos increasing capacity has been further aided by its high seat factor. In April,the airline had seat factors of 83.8% and during the first three months of the year it averaged 82.7%. As long as they maintain their fares at a judicious level and get high seat factors,the increase in capacity is justified, an aviation consultant with a global audit and consultancy firm said.

However,they must remain careful in not deploying too much capacity on the same routes,a mistake that led to Kingfishers problems.

Unlike peers IndiGo has not expanded rapidly into new destinations. The carrier has only 29 domestic destinations compared with Jets 50 cities.

IndiGo is running a tight operation in terms of destinations, the consultant quoted above said. Opening new destinations require a lot more cost than adding capacity and new flights on existing routes. New destinations require more staffing at the airport and ticketing stations as well as investment on ground staff.

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In an recent interview to CNN,IndiGo president Aditya Ghosh said he is content with expanding the network in a phased manner. They (other airlines) fly double the number of planes than we have,but we focus on business, said IndiGos Ghosh in the interview. Staying away from ego,and being consistent,I think thats what is different about us.

Although,Jet is reported to be lining up for placing an order for 50 Boeing 737s and 50 Airbus A320s,experts say IndiGos existing planes on order will still give it the edge when it comes to maintaining the lead in the market share table.

IndiGo doesnt need to place any more aircraft orders for a while now, an executive with a leading aircraft firm said. They will keep adding planes steadily over the course of the next five to six years. The pace at which their planes are arriving,nearly one or two every month,will keep them ahead in terms of capacity.