If you are travelling by air in the near term, be prepared to deal with sky-rocketing fares as 16 percent fleet of the Indian airlines is currently out of operations.
A rigorous check of data from aircraft tracking website Flightradar24, airline websites and company officials showed that of the total fleet of 668 planes spread across nine carriers,
107 aircraft have remained inactive at least since March 14.
Jet Airways, the 26-year-old airline, finds itself at the top of the inactive fleet chart with 59 planes out of service. The severely beleaguered airline is currently running only 61 planes, almost 51 percent of its total fleet of 119 planes, a senior DGCA official told CNBC-TV18.
Maharaja carrier Air India secured the second spot with 17 planes out of operations due to want of spare parts, a senior official said. If one adds two inactive planes of Air India Express and four of regional arm Alliance Air, the total inactive fleet count for the Air India family comes down to 23 out of a cumulative fleet of 171 aircraft.
SpiceJet follows next with 12 grounded planes, taking its total fleet down by 15.7 percent to 64. With nine planes out of operations on account of maintenance, budget carrier GoAir has also cut down its current capacity by over 19 percent.
Market leader IndiGo and AirAsia India also had a four and one aircraft out of operations respectively. Vistara emerged as the only carrier which is currently operating all its 22 aircraft.
This reduction in capacity across airlines is a function of various factors ranging from financial trouble for some to scheduled maintenance for others. Jet Airways, which has been at the centre of a financial storm, has been unable to pay lease rentals on as many as 37 planes, as per its exchange filings. For GoAir, the reasons are related to maintenance.
"The airline business has to factor lean and peak seasons from multiple perspectives – including sales, marketing and maintenance of the aircraft...At GoAir, we follow this very business principle of undertaking “scheduled” maintenance & engineering checks of the aircraft in the months of January, February and March so that GoAir has maximum capacity to cater to in the ensuing peak season. These checks are done purely from the sales-demand perspective," a spokesperson from GoAir said in a query seeking reasons behind its grounded fleet.
For SpiceJet, however, the groundings are on account of safety concerns in Boeing 737 MAX in the aftermath of
Ethiopian Air crash, the second fatal accident in the same aircraft in just under five months.
In order to curtail the impact of these groundings, the airline is withdrawing some low-yields International flights, replacing 737 NG planes with the 78-seater Q400s on some routes to use the NGs for routes earlier served by MAX and rejigging its network, leading to almost 30 cancellations on a daily basis. The situation is, however, expected to slightly improve for the airline from today as it is likely to operate two more 737 NG planes on wet lease.
Add to this the commander shortage problem faced by IndiGo leading to almost 30 flight cancellations a day by the airline and the runway closure at Mumbai airport, and the flight movements get further reduced. But, all is not bad. At least, not for some airlines.
Reduced capacity in the market may actually help the airlines enjoy better yields as a result of
higher airfares. Carriers with relatively healthy balance sheets like IndiGo may gain more market share and better revenue.
"The airlines will get the pricing power. We had started seeing an improvement in the yields since Q3 of FY19. In the near term, there would be issues on the capacity front and that may hit the passenger growth, just like we saw in January when growth slowed down to 9 percent. February could also see single-digit growth...March may also be affected," Kinjal Shah, vice president & co-head of Corporate Sector Ratings, ICRA said.
Spot fares have already shown signs of a steep hike with fares for today's travel on Mumbai-Hyderabad jumping 326 percent higher than year-ago levels of Rs 17,380, data from Yatra.com showed.
"With the current increase in load factors, the reduction in capacity, we expect airfares to rise further in the short to medium term,” Sharat Dhall, COO (B2C) Yatra.com said.
Disclosure: Vistara and Boeing are two of the four launch partners of CNBC-TV18.com