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Indian Airlines Rushing Towards Vacant Aviation Places Amid Jet Airways Crisis

Indian Airlines Rushing Towards Vacant Aviation Places Amid Jet Airways Crisis

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Amidst the current debt conditions and the halted operations of Jet Airways on April 17, India’s airlines are hurrying to fill the vacant places in the aviation sector. 

Faced with a public backlash over soaring fares, the ministry of civil aviation has already formed a committee to temporarily allocate Jet’s vacant slots at airports—a prerequisite to schedule a landing or take-off—to other carriers. 

This is even as the grounded carrier awaits funds from potential investors to revive operations.

Jet’s rivals, whose wings were clipped so far by limited airport infrastructure, are looking to make the most of this opportunity by expanding their fleet.

The most aggressive on this front are budget players IndiGo and SpiceJet, India’s largest and second- largest carrier by passengers flown, respectively, in March.

IndiGo, whose fleet size crossed the 200- aircraft mark last December, said in a statement on April 21 that its expansion plans are on track. It has an “order stream of 430 A320 Neos of which we have already taken delivery of 74 aircraft as of 17 April 2019. The delivery of the remaining aircraft are scheduled over the next 5-6 years.”

SpiceJet, looking to make up for its 11 grounded 737 Boeing Max aircraft, recently announced that it would induct 27 new planes. It looks to add another 23 to take this number to 50, according to a recent report. At least some of these are planes taken from Jet Airways’ former lessors.

In Jet’s plight, SpiceJet has also found a talent pool it can tap. “We are giving first preference to those who have recently lost their jobs due to the unfortunate closure of Jet Airways. We have already provided jobs to more than 100 pilots, more than 200 cabin crew, and more than 200 technical and airport staff,” said Ajay Singh, the airline’s chairman and managing director, in an April 19 statement.

It also announced a code-share partnership with the Gulf-based Emirates airline, on April 22. If the pact gets the regulatory nod, it will ensure that SpiceJet passengers from India get wider connectivity to international destinations in the US, Europe, Africa, and west Asia using Emirates’ network, according to a statement.

Noteworthy here is that Jet had significant operations to the UAE, through a similar arrangement with Emirates’ rival Etihad.

Meanwhile, India’s state-owned airline, Air India, is in talks with Jet to operate the defunct airline’s bigger aircraft for international routes, according to PTI. “Some Boeing 737s might be taken by Air India for its budget carrier, Air India Express,” claimed the news report.

AirAsia India, a joint venture (JV) between India’s Tata Sons and Malaysia’s AirAsia Berhad, also plans to add 14 new aircraft to its fleet, according to reports. 

Meanwhile, Vistara, a domestic JV between Tata Sons and Singapore Airlines, has announced new flights on the Mumbai-Bengaluru route besides new services to Kolkata, Hyderabad, and Goa.

Airfares soar

These measures, however, have so far had only limited success in bridging the demand-supply gap. After all, Jet boasted a fleet of 119 aircraft and possessed, respectively, 280 and 160 prime slots in the busy Mumbai and Delhi airports.

This yawning gap has sent airfares soaring amidst the peak summer travel season.

“For the first half of April, fares are higher by 15%, compared with the same time last year. For last minute bookings, fares are higher by 18% year-on-year,” said Balu Ramachandran, head of air and distribution of online travel portal Cleartrip.

The spike in fares has already set off alarms bells among analysts who now worry about the potential fallout on traffic.

“Airlines can make the most of it (rise in fares), but it has to be seen, how the flyers take it. The condition of traffic and passengers’ reaction are something we need to observe keenly,” said Ashish Nainan, a research analyst with CARE Ratings. “Last year, in November, we had witnessed that once the fares went up; the traffic was not really supportive.”

A similar scenario may be unfolding this year too. “The overall growth story of Indian aviation in the past few quarters came from demand propelled by low fares. Owing to the recent turbulence in aviation space, the industry has witnessed single-digit growth since January,” said Ramachandran.

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