New Delhi : Vistara's announcement of scaling down its operations by reducing 25-30 flights per day which is roughly estimated at 10% of its operations may trigger a sudden surge in the airfare which is likely to hurt the pockets of the air passengers, who will now have to face the brunt of this whole development, say industry experts.
The Tata group airline was hit by several flight cancellations and delays, which were primarily attributed to non-availability of crew, among other reasons and is facing one of its biggest crisis.
The core issue behind this turbulence is the discontentment expressed by a large section of Vistara pilots over their new pay structure ahead of its imminent merger with Air India, and a rostering system that was allegedly stretching them to the limit.
Industry experts say that India's aviation sector is growing at a good pace and but there are some issues which still remain unaddressed.
"Bookings for the country's peak summer period of April-June are already 30-40% higher compared to last year. However there is a major reason for the potential increase in rates due to shortage of supply chain issues. Some flights are already grounded and more likely to be grounded in the coming months", experts opined.
It is pertinent to note here that nearly 200 aircrafts of the fleet size close to 790 aircraft of Indian carriers are expected to be grounded by the end of March due to ongoing supply chain issues, aviation consultancy firm Capa India had said in November 2023.
More than 150 aircrafts were grounded last year in November. Also, Indigo had announced last month that it had grounded about 75 aircrafts due to snags in the Pratt & Whitney engines.
According to the Jaideep Mirchandani, the chairman of UAE-based aviation conglomerate Sky One, India is likely to witness a major increase in domestic passenger traffic between March and October but he also adds that there are possibilities of higher fare.
"One of the major reasons for the potential increase in rates could be supply chain issues. With some flights already grounded and more likely to be grounded in the coming months, the industry anticipates a potential demand-supply imbalance during this summer. This surge in demand and potential supply chain crunch could lead to further hikes in prices," says Jaideep Mirchandani talking to ETV Bharat.
Similarly, Bharatt Malik, Senior VP-Air and Hotel business Yatra online talking to ETV said that "Vistara's decision to reduce flights by 10% has affected ticket prices on major domestic routes. 'We've observed a significant surge in fares, with prices skyrocketing by approximately 20-25% across key routes such as Delhi-Goa, Delhi-Kochi, Delhi-Jammu, and Delhi-Srinagar."
He further added that "Currently, the reduction in flight operations by Vistara, coupled with new guidelines from DGCA has propelled these higher fares. However, it is anticipated that these issues will be resolved in the upcoming weeks, leading to a decrease in airfares. However, with the strong demand for summer travel bookings, fares are most likely to remain on the higher side for the period."
Meanwhile, according to the Air Monitor Report by Amex GBT, globally, flight fares are likely to remain high in 2024.
The report states that ticket fares will remain high within Asian countries, but there will be more competitive pricing for long-haul flights. This projection is based on the assumption that with more flights available for long-distance travel, competition among airlines may drive prices down, resulting in more affordable fares for long-haul routes.
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