Capacity Planning and Yield Management in Indian Budget Airlines

This study compares yield management strategies of India’s leading low-cost carriers, IndiGo and SpiceJet, over 2015–2025. Using real-time fare data from ten popular Bangalore routes across five advance-booking windows (7, 14, 30, 60, 90 days) and financial and operational metrics, analyze how each airline balances pricing, capacity, and market share. IndiGo achieved market share growth from 32.8% to 62.4% and improved operating revenue per 1,000 PKM by 38.7% (₹3.85 → ₹5.34). SpiceJet’s share fell from 13.8% to 3.5% despite a 52.2% yield increase (₹3.72 → ₹5.66). IndiGo maintains controlled price variation (59% across windows) and 100% route availability, supporting its volume-based strategy. SpiceJet shows extreme volatility (158% variation) and 84% average route coverage, reflecting capacity constraints. Composite scoring rates IndiGo’s yield management at 0.871/1.000 versus SpiceJet’s 0.833/1.000. Operational scale gives IndiGo cost advantages, while SpiceJet’s premium pricing limits volume growth. Recommending premium fare classes, AI-driven personalization, and ancillary bundling for IndiGo; and pricing stability, 100% route consistency, and improved fleet utilization for SpiceJet. This research offers actionable insights for enhancing yield management in budget airlines.