Indian airlines collectively reduced their overall passenger capacity by 1.5% in August 2026 compared to the previous year, according to recent data. This contraction was more pronounced in international sectors, which saw a 3.3% decrease, while domestic capacity fell by 0.6%.
Capacity Reductions Across Major Carriers
The reduction in capacity is largely attributed to operational restructuring efforts by various Indian carriers, many of whom are facing significant losses, particularly on international routes. Air India, for instance, saw its capacity contract by 4.2%, equating to 144,000 fewer seats. Air India Express also reduced capacity by 8.4%, removing 228,000 seats. SpiceJet implemented the most significant cuts, slashing its capacity by 16.6%, or 80,000 fewer seats.
Conversely, Akasa Air was the only major airline to report an increase in capacity, adding 23,000 seats for a 2.8% rise.
Market Share and Dominance
- IndiGo: Continues to dominate the Indian market with a 50% share, offering 11.7 million seats in August 2026.
- Air India: Holds the second-largest share at 14%, with 3.3 million seats.
- Low-Cost Carriers: Overall, low-cost airlines account for 69% of the Indian market capacity, totaling 16.3 million seats, despite a 1.6% year-on-year decrease.
- Full-Service Carriers: Account for 7.2 million seats, a 1.2% decrease from the previous year.
International Route Adjustments
The Middle East remains the busiest international market for Indian carriers. The United Arab Emirates (UAE) specifically, despite a 4% reduction in capacity, still represents 15% of the total international market with 1.1 million seats. Saudi Arabia is the second busiest, experiencing a 7% increase in capacity to 331,000 seats, claiming a 4% market share.
Other international destinations saw notable shifts:
- Thailand: Capacity reduced by 21% to 250,000 seats, causing it to drop from the third-busiest international destination.
- Malaysia, Sri Lanka, and Singapore: Experienced capacity reductions of 22%, 13%, and 10% respectively.
- United Kingdom: Saw a significant 25% increase in capacity to 220,000 seats, making it the fifth busiest international market for Indian airlines.
Air India has indicated plans to resume some international sectors starting from September, potentially signaling a strategic recalibration following these August adjustments.