IndiGo Dominates Indian Skies as Aviation Capacity Grows 6% for Winter 2025; Air India Faces Challenges

The Directorate General of Civil Aviation (DGCA) has approved a 6% year-on-year increase in total weekly departures for India's domestic airlines for the Winter Schedule 2025, effective from October 26, 2025, to March 28, 2026. This means a total of 26,495 weekly flights will operate across 126 airports, a rise from last year's schedule.

**IndiGo's Dominance:** InterGlobe Aviation Ltd (IndiGo) is significantly expanding its operations, with a 10% year-on-year increase in weekly flights to 15,014. This growth, coupled with strong reliability, has boosted its market share to 57% of total weekly departures. Jefferies India has reaffirmed a 'Buy' rating on IndiGo with a price target of Rs 6,925, highlighting its consistent capacity expansion, strong execution, and market dominance as drivers for sustained earnings growth, despite industry-wide supply chain disruptions. The brokerage believes IndiGo is well-positioned due to its fleet advantage and disciplined route strategy.

**Air India Group's Challenges:** The Air India Group, including Vistara and Air India Express, is experiencing a decline in capacity, with a 2% year-on-year drop in weekly flights to 7,448. The Air India-Vistara network alone will see an 11% decrease in departures. This reduction is attributed to aircraft availability constraints, merger integration complexities, and aircraft maintenance. Consequently, the Tata Group's consolidated market share has slipped to 28%.

**Other Players:** SpiceJet shows tentative signs of revival with a 21% increase in weekly departures. Akasa Air, however, is slowing its expansion, prioritizing yield management over rapid growth.

**Impact:** This news has a significant impact on the Indian aviation sector and its investors. IndiGo's strong performance and analyst upgrades suggest continued growth and market leadership, potentially boosting its stock value. Conversely, Air India's capacity constraints highlight ongoing operational challenges, which could affect investor sentiment. The overall capacity increase is positive for the economy, supporting travel and tourism. Impact Rating: 8/10

**Difficult Terms:** * **DGCA**: Directorate General of Civil Aviation. It is the regulatory body for aviation in India, responsible for safety, air transport, and economic regulation. * **Winter Schedule (WS)**: A period during which airlines operate their flights based on an approved schedule, typically from late October to late March. * **Weekly Departures**: The number of flights scheduled to take off each week. * **Year-on-year (YoY)**: A comparison of performance metrics over a period with the corresponding period in the previous year. * **Sequentially**: A comparison of performance metrics with the immediately preceding period (e.g., Summer Schedule). * **Aircraft availability constraints**: Limitations in the number of operational aircraft due to factors like maintenance, delivery delays, or leasing issues. * **Equity research report**: A document produced by financial analysts that provides an assessment of a company's prospects and a recommendation to investors. * **Buy rating**: An analyst's recommendation to purchase a company's stock. * **Price target**: A future price level that an analyst predicts for a stock. * **EV/EBITDA**: Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization. A financial metric used to value a company. * **Supply chain disruptions**: Interruptions in the normal flow of goods and services in the production and delivery process. * **Fleet advantage**: A superior position in terms of the number, modernity, or efficiency of an airline's aircraft. * **Aviation Turbine Fuel (ATF)**: The specialized fuel used by jet and turboprop aircraft. * **Rupee depreciation**: A decrease in the value of the Indian Rupee relative to other currencies. * **Merger integration process**: The steps taken to combine the operations, systems, and cultures of two or more companies that have merged. * **Passenger load factors**: The percentage of seats on a flight that are occupied by passengers.