Indian aviation could be heading into another cycle of overcapacity and that is bad news for airlines
Charts and full article on the link
From hyper growth to negative growth, the last eight months have been a rollercoaster for Indian aviation. Capacity induction, led by IndiGo, had fuelled a 20 percent growth in passenger numbers, commensurate with the Available Seat Kilometers (ASK) growth each month. Buoyed by cheaper fares, airline after airline pushed for greater occupancy.
The collapse of Jet Airways has often been partially blamed on too much capacity being dumped in the Indian market. It has become a vicious cycle where quick induction of aircraft leads to over capacity in the market. This capacity has to be filled and to stimulate the market and attract passengers, airlines at times sell seats at low fares. While this generates demand and helps fill up the planes and increase load factors, seldom are such mechanisms profitable in the long run.
Jet's demise offered a brief respite for Indian carriers to raise fares, but another round of capacity increases has diminished this effect. There is merit in offering increased services to/from BOM, but there was no urgent need to increase capacity on other sectors.
Also the constant increase in loads but at low fares is causing strains at the airport and air traffic controls and this calls for another round of airport expansions. May be airports have to impose higher fees on airlines on airport use for domestic sectors to keep capacity increase in line with demand at profitable prices.
Facinating link that doesn't understand a growth industry.
In January, 1.42*10^11 ASK is too much
1.29*10^11 ASK in February is too little in low season.
Assuming the market continues to grow at 20%, that means India needs more than 1.55*10^11 ask in December.
The market should be under-served in 2019 assuming that chart is accurate for growth from ameya's link (quoted).
So unless the India economy really slows, the market is OK in 2019.
Late edit:. My worst case estimate of India growth is 12%. So as long as ASK stays below 1.52*10^11 (average of too much and too little *1.12), which looks certain, the market is going to be fine.
I cannot wait to get vaccinated to live again! Warning: I simulated that it takes 50%+ vaccinated to protect the vaccinated and 75%+ vaccinated to protect the vac-hesitant.