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Airfares Set To Rise Further After Soaring Over 100%


14 March 2019

OMMCOM NEWS


New Delhi/Mumbai: Air passengers might continue to face the grim prospect of high airfares and fewer flight choices as several airlines have cancelled operations for a number of reasons, including the grounding of the Boeing 737-MAX aircraft.

Industry insiders on Thursday pointed out that with no short-term relief in sight, some sectors will continue to see a rise of more than 100 per cent in last minute bookings.

"With no short term relief in sight. Passengers can expect the trend of high airfares to last about a month's time. Passengers should book their tickets in advance," ixigo Co-founder and CEO Aloke Bajpai told IANS.

"With an unprecedented number of planes now grounded due to various factors, reduction in seat capacity has led to an increase in fares overnight. Last minute airfares on Wednesday increased to more than 100 per cent on some key routes like Delhi-Mumbai, Mumbai-Chennai, Mumbai-Kolkata and Mumbai-Bengaluru as compared to same time last year."

As per ixigo, spot fares for Mumbai-Chennai touched Rs 26,073, as opposed to Rs 5,369 the same time last year.

"High airfare patterns are expected to continue in the short-term with Holi and summer school holidays round the corner, resulting in increased demand," Bajpai said.

According to Sharat Dhall, COO (B2C) Yatra.com, civil aviation regulator DGCA's decision to ground the Boeing 737-MAX aircraft has resulted in a fairly significant impact on air fares for immediate travel on certain key routes.

"While overall fares were already on the rise by 15-20 per cent, we have noticed a variable pattern in spot fares with spike in fares on routes such as Mumbai-Hyderabad, Mumbai-Delhi and Delhi-Kolkata.

"With current increase in load factors, this reduction in capacity, we expect the airfares to rise further in the short to medium term," Dhall said.

Operations of airlines like SpiceJet and Jet Airways have been hit due to the government's decision on Wednesday to join a global grounding of 737-MAX aircrafts following a crash in Ethiopia.

In India, SpiceJet and Jet Airways operate 17 Boeing 737-800 MAX aircraft -- Spice (12) and Jet (5). A part of Jet's fleet has already been grounded due to other reasons.

The grounding led SpiceJet to cancel 14 flights on Wednesday. This number is expected to touch 32 on Thursday.

Sources in SpiceJet said that the airline has rejigged its network to bring down cancellation by optimum usage of its existing fleet of 64 planes, route rationalisation and clubbing of flights.

Apart from SpiceJet, financially challenged Jet Airways has already grounded four more aircraft over non-repayment of dues to lessors, taking the total to 32.

The company in BSE filings has said that 19 aircraft were grounded in February over non-repayment of dues to lessors, while 13 others were grounded this month, taking the total to 32. The Jet Airways Group operates a fleet of 123 aircraft.

However, around 50 of the full service carrier's planes are said to be non-operational due to a host of reasons, including lack of spare parts.

Budget carrier IndiGo is going through massive turbulence on account of pilot shortage, leading to a truncated flight schedule.

The airline said earlier that 30 of its flights that have been affected represent only 2 per cent of its network. It has decided to curtail its schedule till March 31, by about 30 flights a day.

"As a proactive measure, IndiGo has decided to continue its curtailment until the end of March. This measure has already been implemented and passengers informed," the airline said in a statement.

"These medium term cancellations have been made to minimise the impact on passengers as alternative travel options have been offered well in advance. The operations will be normalised by the start of the summer schedule."

For sometime now, Air India has grounded 17 aircraft due to technical reasons. The national passenger carrier has also cancelled several international flights on account of low passenger yields on the sectors which include Delhi-Madrid.

The airline said that 6 international flights from Delhi to places like Birmingham have been cancelled.

On Wednesday, the government had advised domestic airlines not to go in for predatory air fare pricing as several 737-MAX aircraft were grounded due to safety reasons.

Civil Aviation Secretary Pradeep Singh Kharola said: "We have advised the airlines... that they should not use it (grounding) as a reason to jack up their fares."

"They have promised they will go as per normal routine. DGCA has just said that it will be monitoring all the sectors very closely."

(IANS)