New Delhi, June 23 -- Akasa Air aims to expand its passenger capacity by about 30% this fiscal year, bucking an industry trend of caution as larger rivals trim routes or rein in growth plans. The country's third-largest airline by domestic market share is pushing ahead after narrowing losses and reporting six straight months of operational profitability before the West Asia war-led disruptions hit the momentum.

Akasa's rivals are playing it safe. Market leader IndiGo has indicated that fleet adjustments-including return of older leased aircraft that consume higher fuel-could lead to some route rationalization and it has also announced overseas route cuts. India's second largest carrier Air India has already trimmed capacity on some domes...