The duration for which airlines can temporarily use slots previously held by Jet Airways has been extended till December. Jet Airways was grounded on April 17 due to financial crunch, which left a huge gap in operations to be filled by other carriers. Due to the grounding of Jet, the government had decided to temporarily reallocate its slots as well as its international flying rights till September to other carriers, which started flights on sectors where a supply gap was created.
Jet Airways is undergoing insolvency proceedings and at least three entities have put in initial bids for the carrier.
A slot is a date and time at which an airline’s aircraft is permitted to depart or arrive at an airport. For an airline of a particular country to operate international flights to another country, the two countries have to negotiate and sign a ‘bilateral air services agreement’, which decides how many aircraft (or seats) can be allowed to fly from one nation to another per week.
Once such an agreement is signed, each country is free to allocate these flying rights to its respective airlines. Even after such flying rights are allocated to an airline, it must have slots at both the airports in order to start flight operations.
In the aftermath of Jet Airways’ collapse, the Ministry of Civil Aviation temporarily reallocated over 2,500 of the airline’s slots, including prime ones in airports such as Delhi and Mumbai. On the back of these new slots, a research report by securities firm Elara Capital said the market share of low-cost carriers SpiceJet, IndiGo and GoAir are expected to go up by 6 per cent, 5 per cent and 2 per cent, respectively.
The research report noted that about 43 per cent of the slots vacated by Jet in Delhi and Mumbai were picked up by SpiceJet, while 32 per cent were allocated to IndiGo, followed by GoAir at 13 per cent, and Vistara and AirAsia India at 7 per cent and 4 per cent, respectively.
“Given Delhi and Mumbai airports comprised 60 per cent of the domestic passenger movement during FY19; we believe these two airports are proxy of all-India market share gain by carriers at the expense of Jet Airways,” the report pointed out, adding that the grounded airline used 24 per cent of the slots at the two largest airports in Indian.
Of the total slots reallocated in Delhi and Mumbai, Elara Capital said, 33 per cent are peak slots. 50 per cent of the 548 peak slots have been allocated to SpiceJet while 34 per cent have been given to IndiGo. GoAir and Vistara have been allocated 7 per cent and 8 per cent of the peak slots at these airports, respectively.