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aviation | IST

CAPA expects airfares to go up in coming quarters due to shortage of flights

Aviation stocks came under pressure this morning after the Directorate General of Civil Aviation (DGCA) decided to ground all Boeing 737 Max planes operated by SpiceJet and Jet Airways. Kapil Kaul, South Asia CEO at Sydney-based consultant CAPA, spoke about the development.
"The number of Boeing 737 MAX 8 operating in India currently are 12-13 and that’s only with SpiceJet. Jet Airways has already grounded the Max planes because of funding challenges. The current suspension is not expected to impact operations significantly," Kaul told CNBC-TV18 on Wednesday.
“There is already a significant capacity reduction by Jet, almost 40-50 aircrafts grounded, the pilot related challenges which have led to grounding it - GoAir as well as Indigo and combine all these together and also we are heading for a peak period therefore, fares would go up and it would be a significant quarter one from the consumers’ perspective because there will be capacity shortage and the fares logically would be much higher than that normally is in Q1,” he added.
According to him, international routes might get majorly impacted if Jet's resolution plan gets delayed.
“My view is that even if the resolution plan gets structured, for them (Jet) to bring these planes up in the air very quickly is going to be difficult. So we have an issue for sure,” Kaul said.