InvestorQ : What will be the implications of allowing airlines to now run at 100% capacity for SpiceJet and Indigo?
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What will be the implications of allowing airlines to now run at 100% capacity for SpiceJet and Indigo?

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Rashi Mehra answered.
2 months ago
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The Ministry of Civil Aviation on Tuesday confirmed that it had totally scrapped the cap on domestic flying capacity. Now, all airlines can fly at 100% of their pre-COVID capacity and this will allow normalcy to return to operations. Capacity caps have been a way of life for the airline industry since May-20 and currently the cap stands at 85% capacity. The cap has been totally removed in the light of rising demand for air travel and sharp fall in COVID.

However, The Ministry has clarified that all airlines should mandatorily adhere to the guidelines to contain the spread of COVID. This is likely to be a positive boost for airline companies as it will allow them to improve their passenger load factors or PLF further and also enable better absorption of fixed costs leading to improvement in the spread between CASK and RASK.

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