Aviation troubles could impact business; hike in airfare imminent, warn industry insiders

April 15, 2019 | Shashank Shekhar | India Outbound

The trouble surrounding Jet Airways and IndiGo cutting down on flights were threatening to impact business in the summer season, noted stakeholders. They, however, suggested that it was short-term crisis and the situation was expected to improve in a few month’s time.

Subhash Goyal
Chairman, STIC Group

Uncertainty looms over the fate of Jet Airways as it awaits expression of interest from bidders keen on a stake in the carrier. Meanwhile, there is still suspense on whether the airline will formally continue operations. Its operational fleet has currently shrunk to six aircraft. As Jet Airways battles for existence, IndiGo is facing a different kind of crisis. It was forced to cut down 30 flights each day in February, till end-March. We understand that it has now been extended effectively until the end of summer. An expressive expansion coinciding with a shortage of pilots has tied down the LCC.

There is a well-founded apprehension that airfares could increase exponentially as a result of this shortage, impacting business in the summer season. “With Jet Airways cancelling flights and the shortage of pilots in IndiGo airlines, the demand has increased but the supply has shrunk, so it is obvious that the fares for both domestic and international (routes) are going to shoot up.  If there is no solution to the problem of Jet Airways within the next few days, then there is going to be a serious problem and airfares might touch the roof,” warned Subhash Goyal.

Neelu Singh reverberated similar sentiments, sharing that lesser number of flights has substantially reduced the capacity, leading to a fare hike of “at least 12 per cent.”  “The decline in the number of flights is bringing down the capacity substantially and the fares have increased by at least 12%. Domestic airports like Delhi, Kolkata, Chennai are feeling the heat, with factors like cancellation, grounding of flights and unavailability of pilots, among others,” said Neelu Singh.  She, however, expressed confidence in a quick revival. “With the peak holiday season around and intervention from other airline players, the passenger load is witnessing an increase. Air Asia and Vistara have increased their flights on key routes also trying to fill in unused airport slots. Other airlines are offering promotional discounts to increase demand.  We expect the situation to normalise by May and lessen passenger inconvenience,” she forecasted.

Neelu Singh
CEO, Ezeego1.com

When asked whether the election season was also contributing to the sluggishness, Subhash Goyal reasoned that travelling was “only reduced on few days” and there was not much impact. “The trend in the summer is always to go to the hills and cooler areas of the country or to those countries where the climate is cooler,” he said, sharing his thoughts on the trend in the summer season.

Neelu Singh suggested that Europe had continued to be a “summer favourite” for the Indian outbound, but there was a visible change in how travellers were exploring the continent. “From exploring 7 destinations in 12 days, the discerning Indian traveller has finally arrived and is exploring a mono-destination in depth, rather than country hopping every few days. There is a shift in the travel pattern of Indians discovering Europe,” she informed.  Adding that while visiting the Eiffel Tower was an obvious part of the itinerary, but tasting wine at Bordeaux, a hot-air balloon ride over Loire Valley, camping in Corsica or enjoying a seven-course meal in Paris were also increasingly becoming a part of the destination discovery.  “There is a 20-25 % increase in demand for single country destinations in Europe. Travellers are exploring a country in different ways and at their own pace at reasonable costs. European countries like the Czech Republic, Austria, Slovakia, Hungary, Germany, France, and Spain are some of the most favoured destinations this summer,” she shared.  

“Self-Drive holidays in Australia and New Zealand are also popular this summer. These destinations are piquing the interest of Indian travellers with variety in offerings and increased competition. Bhutan is a hot favourite in short-haul destinations,” Neelu Singh further said.