Cancellations of around 150-200 flights a day — 5 per cent of the total capacity in the country — last month resulted in increase of air fares by up to 40 per cent out of certain airports. The capacity reduction occurred mainly on account of cancellations by India’s two of the largest airlines IndiGo and Jet Airways due to shortage of pilots and grounding of aircraft, respectively.
In addition to this, partial closures at the country’s second and third largest airports — Mumbai and Bengaluru — contributed to the decrease in available capacity.
Experts believe that while the issue with capacity reduction was a short-term phenomenon, a prolonged fare increase period could create a pressure on India’s air traffic growth — which was clocked at more than 20 per cent every month during the last one year.
Shortage of flight commanders coupled with restructuring of its roster resulted in IndiGo cancelling more than 30 flights every day during the last month, while additional grounding of 25 aircraft by cash-strapped Jet Airways has forced the airline to cancel about 100 flights every day, according to industry analysts.
“Load factors of all airlines have been high and we have seen that they have been more than 80 per cent-90 per cent during the last year for most. But even then at the last minute there were some seats empty that is not the case now. This has pushed the last-minute fares having an impact on the business travellers who make these last-minute bookings. On an average, during February there was an 18 per cent increase in prices over the last one year but from some airports such as Mumbai and Bengaluru where there were partial closures, the fare increases were in the range of 25 to 40 per cent,” Sharat Dhall, COO-B2C, Yatra.com told The Indian Express.
Due to maintenance work, Mumbai airport’s runway is being closed for six hours, thrice a week from February 7 till March 30, while Bengaluru airport faced partial closures for around 10 days in February.
Even though IndiGo has claimed that it expects the operations to stabilise by April 1, Jet Airways’ situation is dependent on fund infusion into the airline that will release its aircraft grounded due to non-payment of dues to lessors. Between February 7 and March 4, Jet Airways has grounded 25 aircraft. In a notice to the stock exchanges on Monday, the airline said: “As mentioned earlier, the company is actively engaged with all its aircraft lessors and regularly provides them with updates on the efforts undertaken by the company to improve its liquidity. Aircraft lessors have been supportive of the company’s efforts in this regard. The company is also making all efforts to minimise disruption to its network due to the above and is proactively informing and re-accommodating its affected guests”.
“If we do not see additional capacity coming in soon, including from other players in the market then you are likely to see fares go up because of which there can be slowdown in growth too,” Dhall said, when asked if the peak travel period that begins end of March could also see a spike in fares compared with last year.