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Wednesday, February 26, 2020

Explained: Why several GoAir flights have been cancelled

While the development could hit GoAir's expansion plans, it would prove beneficial for the profitability of the airline and also its rivals in the short term, but could be a negative for Indian flyers.

Written by Pranav Mukul | Published: January 24, 2020 1:49:00 pm
Explained: Why several GoAir flights have been cancelled GoAir said that in the last four weeks, it has gone through unplanned grounding of aircraft.

Budget airline GoAir said Thursday that it will cancel some of its flights owing to a delay in delivery of new aircraft and engines by airframe manufacturer Airbus and engine-maker Pratt & Whitney, respectively. While the development could hit GoAir’s expansion plans, it would prove beneficial for the profitability of the airline and also its rivals in the short term, but could be a negative for Indian flyers.

Why is GoAir cancelling flights?

The airline operates its fleet of A320neo aircraft on the beleaguered Pratt & Whitney PW1100G model of aero engines. These powerplants, that were launched with a brand-new geared turbofan technology, have undergone a number of issues in the past two years that have resulted in airlines including GoAir and its rival India’s largest airline IndiGo to ground aircraft and replace engines with modified parts. The Indian aviation regulator DGCA has asked GoAir and IndiGo to ensure that all of their engines are replaced with modified components before May 31. GoAir said that in the last four weeks, it has gone through unplanned grounding of aircraft and has now been informed by the manufacturers of their inability to deliver previously promised aircraft and engines till March 9, 2020. As a result, it has been forced to temporarily suspend certain flights that are a part of its network schedule and are open for sale.

What it means for consumers?

As witnessed in the past, cancellation in flights on any route that is competitive results in a decreased supply thereby encouraging airlines to increase fares on those routes. Although GoAir did not disclose the routes on which the flights are being cancelled, it has said that it will be suspending flights as far ahead in the schedule as possible. Sector watchers expect the disruption to be worst during the upcoming summer vacation season. Additionally, for those who are booked on flights that are being cancelled, the charter of passenger rights issued by the regulator puts the onus on the airline in cases like these to either book the passengers on other flights or offer a full refund.

What it means for other airlines?

Airlines have often complained about overcapacity in the sector that has given them reduced pricing power even when their costs rise. Domestic carriers will be looking at this development positively as this could give them room to increase fares and tap a potential for better yields. Particularly, the summer season is a good period for airline as higher demand pushes the fares up anyway. Cancellation of a number of flights by a carrier that has more than 10 per cent market share in domestic air passenger traffic would be a cherry on top for GoAir’s rivals in the sector.

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