NEW DELHI, MAY 2 : As soaring air ticket prices threaten to slacken the pace of growth of the domestic air passenger segment, airlines are now being forced to rethink on planned capacity additions. Low-cost carriers like SpiceJet are now planning to lease out half of the new aircraft they will procure this year, while full-service carriers like Jet Airways and Kingfisher Airlines will only increase capacity ‘moderately’.

In a clear indication of a looming slowdown, no-frills operator SpiceJet, which currently runs a fleet of 17 aircraft, says it is exploring opportunities to wet-lease its aircraft. “While we will be adding six new aircraft this year, we are looking at giving about three of these on wet lease. So our net net capacity addition this year will be only three aircraft,” said Samyukth Sridharan, chief commercial officer of SpiceJet. Its rival, the Wadia group-promoted GoAir is also adopting a flexible fleet plan to react to the situation.

Market leader Jet Airways which claimed almost 30 per cent market share along with its subsidiary JetLite, also says it will increase capacity only slightly. “Unlike others who are planning a 20-30 per cent increase, we are looking at a 10 per cent addition to our fleet this year. The moderate expansion matches the slowing industry growth and that is what the market requires,” said Saroj Datta, chief executive of Jet. The airline will add only five ATR planes and two Boeing 737 planes this year. JetLite too, would add no more than two planes by December.

The Kingfisher-Deccan combine has also adopted a policy of fleet rationalisation. It is said to be adding 8-10 aircraft a year instead of 20 as envisaged earlier. “The rate at which capacity is being inducted into the industry is falling. We are looking at more rationalised expansion,” a UB group spokesperson said.

According to experts like Kapil Kaul, chief executive officer (Indian subcontinent and Middle East) of the Center for Asia Pacific Aviation, expansions have been consistently falling over the last two years. “In 2005-06, the domestic airline industry saw an average addition of six aircraft a month. Last year it was four and this year it’s likely to be three aircraft a month,” he says.

With rising jet fuel costs leading to costlier tickets, passengers are being increasingly driven away. In the last quarter, the industry grew just 11-12 per cent over the year-ago quarter. This is the lowest growth witnessed at any point in the last four years which have seen some quarters showing robust growth of even 45 per cent.