Air India to gain market share with more planes

Air India expects the 40-odd new airplanes it will induct over two years to help it regain the domestic market share it lost to private players.

The national carrier plans to order 10 Airbus 320s to increase capacity, in addition to the 30 it has ordered from the European plane maker. The airline plans to increase its fleet size by 30-40 in two to three years.

Ashwani Lohani, chairman and managing director of Air India, said here on Monday they have not been able to add capacity on the domestic side. “There is going to a huge induction (of aircraft) in domestic capacity in the next one year. Today we have 55 aircraft and connect 68 domestic destination, whereas our nearest competition has 100 aircraft connecting just 38 destinations. With fleet expansion, we will have much more coverage and capacity. We will regain our market share.”

Air India, once a dominant player in India’s aviation market, had 16 per cent market share as on June. It had reported losses of Rs 246 crore for the June quarter. The carrier reported operating profit of Rs 100-110 crore last financial year due to lower fuel costs.

“The mantra we have to achieve sustained profitability for the airlines is, fill more and fly more,” said the chairman and managing director.

The airline’s domestic market share had gone down, he said, because all private carriers such as Indigo, GoAir were continuously adding capacity.

Domestic travel has been increasing by 20 per cent in the country, Lohani said. The trend was likely to continue and the airline has to be prepared. The airline is also increasing routes in the international sector.

In the last one year, the airline had introduced four international routes and would add six to the list the coming year. “The focus is on US, Europe, Singapore, Australia and Bangkok, with direct non-stop flights,” said Lohani.

The airline had initially ordered 27 Dreamliners and 21 have joined the fleet. Six more will join the fleet in a year. The airlines has also ordered three 777s. So nine new aircrafts would be joining the fleet in the next one year.Lohani said while the airlines was moving towards profitability, he cannot say when exactly they would become completely profitable.

“The airlines business is a highly dynamic business. There is no timeline for when we will be profitable. However, we will put in our best and wait for the results. Ticket prices are decided by the market, we do not want the yields to fall but they are falling,” he added.