Airline after airline is curtailing operations in India, forcing passengers to shell out more for their travel.
The pileup of grounded planes, and carriers operating on truncated schedules, could not have come at a worse time. The annual school holidays, starting April, is peak travel period in the country and flight booking sites are already recording a spike in airfares.
“The [airfare] rise is more acute between major cities and more impact is seen in last-minute fares [less than seven days]. For instance, on the Pune-Bangalore route, last-minute fares are up by 44%. On the Pune-Mumbai route, ticket rates are up by 24%, Delhi-Mumbai flight charges are 14% higher and on the Mumbai-Bangalore route, rates have increased 30%,” Balu Ramachandran, head of air and distribution at Cleartrip, told Quartz in an email.
Ramachandran expects a further fare increase of between 10% and 20% on average.
This is despite the government’s efforts to insulate passengers from the sector’s turbulence. Last week, India’s civil aviation secretary Pradeep Singh Kharola advised carriers to refrain from hiking fares. “The [civil aviation regulator] DGCA [directorate general of civil aviation] has said it will be monitoring all the sectors very closely…”
Troubles mount for Jet
At the heart of the crisis is the financially-embattled private carrier Jet Airways, which was till December-end India’s second-biggest carrier by domestic passengers flown. The Naresh Goyal-promoted airline is now grounding planes almost on a daily basis as it struggles to pay its lessors.
Keen to avoid passenger ire, given that a general election is around the corner, India’s minister for civil aviation was quick to step in on Tuesday.
Following the meeting, the DGCA issued a statement saying it expects the situation at Jet Airways to deteriorate: “The DGCA reviewed the performance of Jet Airways on operational, airworthiness & passenger facilitation today…it is a dynamic situation and there may be further attrition in coming weeks.”
The regulator said Jet currently has 41 operational aircraft, merely a third of its 119-strong fleet. The airline is “offering re-accommodation choices or extending applicable refunds (to passengers) as per the situation.”
Besides lessors, Jet has also been struggling to pay its staff. Late on Tuesday, its pilots’ body, the National Aviators Guild, threatened to stop flying from April 01 if the salary dues were not cleared.
Meanwhile, Goyal’s efforts to rope in an investor are yet to fructify and, till then, the airline will struggle to stay airborne.
Caught in an air pocket
While the full-service Jet’s woes are internal, India’s budget carriers are facing external headwinds. SpiceJet, India’s third largest carrier by market share in January, was last week forced by the DGCA to ground the 13 Boeing 737 MAX 8 jets in its fleet.
The watchdog’s move followed the crash of an Ethiopian Airlines aircraft of the same make in Addis Ababa on March 10 and is in line with the measures taken by several global regulators. The airline has pending orders for 155 Boeing 737 MAX 8 jets, betting as it is on this model to propel growth.
Market leader IndiGo, which flew over 40% of India’s domestic passengers in January, is paying the price for rapid growth. Facing an acute shortage of pilots for its 213 aircraft, the airline had said it would cancel around 30 flights a day through March 31. IndiGo added 19 Airbus aircraft to its fleet in the October-December period.
Pakistan’s restrictions on Indian jets using its airspace have hit international flights in the meantime, media reports say. These restrictions followed the flaring up of tensions along the border last month. SpiceJet has suspended its daily flight to Kabul, according to the Mint daily.
Th curbs have also increased operational costs for airlines. Air India flights from Delhi to the US, for instance, have been taking a detour through Mumbai to avoid Pakistan airspace, the report noted.
This article first appeared on Quartz.
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