Summer holiday woes: Air fares set to rise amid Jet crisis
The 2019 summer holiday travel season is expected to be marred by high air fares as debt-ridden Jet Airways gradually truncates flight operations, experts said.
 
Even though the airline, lenders and the government are still hopeful of a revival, the current trend might see Jet operating a bare minimum fleet, thus bumping up air fares.
 
"The grounding of aircraft due to liquidity issues with Jet Airways and regulatory directive for the grounding of B737 Max aircraft have resulted in 15 per cent impact on the industry capacity," said Kinjal Shah, Vice President, Corporate Ratings, ICRA. 
 
"This has definitely resulted in passenger inconvenience. Furthermore, it has resulted in a significant increase in fares. With the industry capacity remaining constrained, the fares are expected to remain high in the near term." 
 
Jet's woes assume criticality as the airline which once operated around 120 aircraft is left with just 16 in its fleet. Last Friday it operated 11 aircraft.
 
The airline has currently suspended international operations till the weekend. It has also cancelled domestic flights, leaving passengers stranded at various airports. This led even the Prime Minister's Office (PMO) to assess Jet Airways' financial situation.
 
"With Jet now cancelling international flights, the rising fare situation is set to get worse if capacity is not increased before peak summer travel season," said Aloke Bajpai, CEO and Co-founder, ixigo. 
 
"A comparative analysis of April 2019 fares and what the scenario was last year shows that fares for flights originating from Delhi have increased by 19 per cent and fares for flights from Mumbai are up by 36 per cent. Passengers who are planning their summer leisure travel will also be impacted due to availability of seats."
 
According to Sharat Dhall, COO (B2C), Yatra.com said: "With the peak travel season having kicked off, we expect airlines to induct more aircrafts to tap into the increased demand on the key business and leisure routes."
 
"This will also result in a rationalisation of air fares and we expect them to increase only marginally as compared to the same season last year." 
 
In addition, Dhall said: "We see other carriers adding capacity on a daily basis to fill the demand-supply gap and that is keeping fares under control."
 
"It is only the last-minute fares that are seeing a jump. So it is unlikely to impact the summer vacation travel season as most leisure travellers book well in advance and will not be impacted."
 
The trend of high air fares that was triggered due to Jet's truncation of its operations was amplified by oil marketing companies, as they increased the price of aviation turbine fuel (ATF).
 
Since March 14, passengers had to shell out high fares as several more flights were cancelled due to grounding of Boeing 737-MAX aircraft.
 
Culmination of these factors are expected to decelerate the growth of air passenger traffic in the country.
 
In a recent note, ratings agency Fitch said that Indian aviation market has seen a sharp increase in air fares in the last few months due to tight supply, which has been worsened by the suspension of the 737 MAX aircraft. 
 
"Fitch expects the growth in revenue passenger kilometres (RPK), which decelerated to 12.4 per cent in January (2018: 19.9 per cent), to weaken further until supply increases," the rating agency said in a note.
 
In addition, the note said that Jet Airways, which along with its subsidiary JetLite, had the second-largest share of the domestic market until January, has been steadily losing market share as it has been forced to shrink its operating fleet due to financial troubles. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
Like this story? Get our top stories by email.

User

IndiGo Delhi-Mumbai flight makes mid-air 'turn back'
Budget carrier IndiGo's Delhi-Mumbai flight had to perform a mid-air "turn back" manoeuvre due to excessive vibration from the aircraft's engine number two, industry insiders privy to the development said on Friday.
 
However, an airline official said that the aircraft had suffered a bird hit en-route from Delhi to Mumbai on Wednesday.
 
The A320 NEO aircraft operated by IndiGo has faced a series of problems earlier with engine vibration being one of them.
 
Industry sources said that at least 15 cases of mid-air engine problems have been reported in the A320 NEOs operated by IndiGo and GoAir since January.
 
Engine vibration resulting in mid-air turn backs has emerged as the most common and serious safety issue with the P&W engine powered NEOs of late.
 
The country's aviation regulator is said to be examining the incident.
 
Wednesday's incident comes days after the budget passenger carrier's Delhi-Istanbul flight had to be diverted to Kuwait.
 
The airline that time had said that an engine snag had hit its A320 NEO aircraft which was en-route from Delhi to Istanbul.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

User

COMMENTS

Deepak Narain

3 days ago

This situation could have been avoided if the various regulatory authorities had acted when things started going out of hand. Now, government should intervene to revive Jet.

Death in a Swimming Pool: Lessons for All
Very soon, the holiday season will be upon us and families will be all set for their summer vacation. Most holiday destinations worth their star rating have a swimming pool these days and it is a magnet, both for serious swimmers as well as those who want to splash in the shallows or just lounge around the water. 
 
It is all great fun, unless something untoward happens, as it did...
Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital Access

Subscribe

Moneylife Magazine Subscriber or MAS member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

online financial advisory
Pathbreakers
Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
online financia advisory
The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
financial magazines online
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
financial magazines in india
MAS: Complete Online Financial Advisory
(Includes Moneylife Online Magazine)