With only two listed airlines in India and the major airlines’ count falling over the years, it has become very difficult to understand the finances, and how the industry is doing. To study the Indian aviation industry is then tasked upon the data released by the regulator from time to time and comprehend various angles that come out. As IndiGo’s management talked about the growth it had in Q1 of this financial year, it was time to look at how the industry performed, who was below average and who was above.
Q1-FY26 vs Q1-FY25
Indian aviation has two good quarters, April to June (Q1-FY) and October to December (Q3-FY). The first is characterised by the summer holidays in the country which start at varying periods across the country and end accordingly, thus helping airlines see a staggered and long holiday travel, and the second driven by festivals which sees regional travel and the Diwali and Christmas holidays, which again fuels leisure travel. This year, the Q1 was different. Things were looking upbeat with some sectors seeing the highest planned capacity ever. Then came the ghastly terrorist attack at Pahalgam killing over 20 civilians, followed by Operation Sindoor in May and the deadly crash of AI171 in June. Each had its impact, each led to a dip in expected traffic. While the traffic scraped through the traffic of the corresponding month of last year, the growth was moderate.
The market situation led to airlines pulling out capacity and that led to the growth being moderated. The true measure of capacity is Available Seat Kilometers (ASK). However, this article looks at three parameters, capacity by ASK, Departures and Passengers. While not a thumb rule, a general indication of capacity and passenger numbers going hand in hand in terms of growth is an indicator that the airline is able to successfully deploy capacity in the market since it can attract passengers. The revenue factor definitely has a role to play in this.
In Q1-FY26, the Indian domestic market grew by 9.7% by ASK, 5.5% by departures and saw 4.4% more passengers over the same period last year. The higher growth in ASK but lower in departures is an indicator of airlines starting longer flights in domestic skies but the passenger growth not being in line is also an indicator of how the market turned out to be.
Up, up and beyond
Air India Express was the clear winner in this capacity addition game as it grew by 57% by ASK, as well as departures and carried 52% more traffic this year as compared to last when comparing the first quarters of the financial year. This was followed by Akasa Air, which grew by 26% by ASK, added 10% more departures and ferried 16.1% more traffic.
For the sake of calculation, the data for Air India includes that of Air India and Vistara for last year and for Air India Express, it includes Air India Express and AIX Connect (erstwhile AirAsia India) for last year to have a fair comparison.
While the crash of AI171 happened in June, Air India has shrunk for the entire quarter with 12% fewer ASKs, 11% fewer departures and a resultant drop of 23% in passengers. The worst performance though continues to be with Spicejet which shrunk by nearly 35% by ASK, offering 31% fewer departures and 41% fewer passengers on domestic routes.
IndiGo & Air India Express added one Akasa Air each
While the most famous quote on statistics is known, my favorite is “”In our lust for measurement, we frequently measure that which we can rather than that which we wish to measure… and forget that there is a difference.” George Udny Yule
With a large base, IndiGo’s growth of 12% ASKs and 8.5% departures may be above average, but when converted to absolute numbers, the airline flew 13,896 additional departures in Q1-FY26 as compared to Q1-FY25. Not surprising, it’s more than what Akasa Air flew as it operated 12,619 domestic departures in Q1-FY26. Essentially, IndiGo adds one Akasa Air equivalent capacity each quarter.
However, this time around IndiGo was joined by Air India Express in adding one Akasa Air equivalent airline as Air India Express added 12,279 departures in Q1-FY26 as compared to Q1-FY25. This shows two things, Air India Express growing much faster since it is adding capacity equivalent to IndiGo in absolute numbers with IndiGo being roughly 3.5 times Air India Express, and secondly the challenge which Akasa Air faces to grow since now it has two and not one competitor in the market.
Network Thoughts
IndiGo announced a profit in Q1-FY26 even amidst the chaos, while Air India group has been reeling under the AI171 aftermath. Akasa Air is quietly building its network, having burned its fingers after initial announcements which took time to materialise. The supply chain constraints have meant that aircraft are hard to come by and growth difficult to maintain. This is possibly a better scenario than being in a phase where growth is difficult to sustain because the market condition is bad. Either way, perfect equilibrium hardly exists in aviation and history has shown that time and again.
The current quarter has seen a sharp cut in capacity by IndiGo and Air India. The market has also shrunk, but as we move towards Durga Puja and into Navratra and Diwali, the market is poised for the uptick again. Who will gain this holiday season?
This article has been co-authored with Yash Agarwal – a Public Policy professional who juggles multiple hats as a part time entrepreneur and a full time plane spotter and Trinidade Gois – Sound Engineer and Aviation Enthusiast. Data has been taken from publicly available sources. International data has been left out since it was found to be erroneous.
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