State-owned Indian Airlines has shelved plans to lease four new Airbus A320s for domestic routes, because of worse-than-expected traffic figures.

The carrier began its search in April for International Aero Engines V2500-powered aircraft to dry lease for three years from October. But traffic growth up to next March looks set to reach barely half the predicted 5% increase on which the carrier had been counting. The airline says that it foresees only "marginal" growth in traffic this year and next, and that it no longer needs the aircraft.

Indian Airlines already operates 30 A320s. The additional aircraft would have been used in the expansion of domestic, and possibly regional, services.

The carrier and its subsidiary, Alliance Air, dominate Indian domestic air transport, collectively holding 64% of the market, although it has been losing market share to privately owned Jet Airways and Sahara India Airlines.

Source: Flight International