India's domestic airline sector is experiencing an unexpected contraction in capacity ahead of the crucial festive season, according to recent data. Despite expectations for increased travel demand, overall seat capacity has decreased, with several major carriers scaling back their operations.
Overall Capacity Decline and Key Players
Data from aviation research firm OAG indicates that total seat capacity across Indian airlines for September 2026 stands at 22.7 million, a 4.5% reduction compared to the same period last year. This decline follows a capacity of 23.5 million seats in August, suggesting a continuing downward trend rather than the anticipated ramp-up for the holiday period.
The reduction is evident across both domestic and international segments. Domestic capacity saw a 5.6% decrease, while international capacity fell by 2.1%.
Low-Cost vs. Full-Service Carriers
Low-cost airlines continue to dominate the Indian market, accounting for 69% of the total capacity with 15.7 million seats. However, this represents a 4% decrease year-on-year. Full-service carriers offered 7 million seats, experiencing an even sharper decline of 5.4% compared to the previous year.
Airline-Specific Reductions and Growth
- IndiGo: The largest carrier, IndiGo, offered 11.3 million seats in September 2026, but this marks a 4.5% reduction, or 525,600 fewer seats, from last year.
- Air India: As the second-largest airline with a 14% market share (3.2 million seats), Air India also saw a significant contraction of 8.8%, removing 309,000 seats.
- Air India Express: This subsidiary reduced its capacity by 2.6%, cutting 68,000 seats.
- SpiceJet: Facing financial challenges, SpiceJet implemented the most drastic cuts, reducing capacity by 45.2%, equivalent to 215,000 fewer seats.
In contrast to the general trend, only a few airlines managed to increase their capacity:
- Akasa Air: Showed notable growth, increasing its capacity by 5%.
- Emirates: Registered a modest 0.3% increase in capacity for flights to and from India.
International Route Adjustments
Internationally, the United Arab Emirates remains the busiest market from India, despite a 5% reduction in capacity to 1.1 million seats, still representing 28% of the total international market. Saudi Arabia followed, increasing capacity by 12% to 336,000 seats, securing a 9% market share.
Other international routes experienced significant changes:
- Capacity to Thailand decreased by 23% to 238,000 seats.
- Malaysia and Singapore saw reductions of 13% and 12% respectively.
- Conversely, capacity to the UK increased by 16% to 200,000 seats, making it the sixth busiest market.
- Italy experienced a substantial 194% increase in capacity, reaching 42,000 seats.
Underlying Causes
The ongoing geopolitical challenges and rising operational losses are cited as key factors contributing to the cautious approach by Indian airlines. These pressures are forcing carriers to optimize their networks and capacity, even at the cost of potential festive season gains.