india

Updated: Mar 14, 2019 08:07 IST

Air fares in India have shot up as a fresh round of cancellations on account of the ban on Boeing 737 MAX 8 aircraft on Wednesday added to a litany of problems besieging Indian airlines, whose per-day scrapped flight toll is now touching 150.

Ticket booking websites put the average jump in fares at 40-50%, with some sectors recording as much as a 100% spike in last-minute ticket prices. The immediate trigger for the problem, which is expected to worsen as school holidays begin next month, was the grounding of 13 SpiceJet Boeing 737 MAX 8 aircraft, the type involved in a fatal crash in Ethiopia on Sunday and in Indonesia last October.

“Tomorrow is going to be a real challenging day because today [Wednesday] the ban has come into effect only from the second half of the day... SpiceJet has assured us that they have taken up multiple plans. They have increased the utilisation of existing aircraft so that the cancellations get limited,” civil aviation secretary PS Kharola said.

IndiGo, the country’s leading domestic airline by market share, in mid-February announced that it will be cancelling 30 flights a day till March 31 due to a shortage of pilots. Jet Airways, the second largest airline by market share, is reeling from a liquidity crunch that forced it to ground 50 jets, which translate to at least 100 flights.

Air India, which has the third-highest market share, has grounded 17 aircraft for technical reasons such as non-availability of spare parts, according to Directorate General of Civil Aviation (DGCA) data.

The average increase in same-day fares is 40-50%, while last-minute fare from Delhi and Mumbai noticed a significant increase, which in some cases has even been 100%, according to Aloke Bajpai, CEO and co-founder of Ixigo, a travel booking website.

“At least 50 planes are out of action or grounded on the domestic front owing to multiple reasons. That is a significant reduction in domestic airline capacity. The additional capacity coming in is not likely to cover this in the short term, while demand is going to be robust over the next few months because of the school holidays season and surging leisure travel,” said Sharat Dhall, chief operating officer (COO) of travel search engine Yatra.com.

“The shortage of planes and high seat occupancies are expected to push airfares north in the short term. The airfares were at least 15% higher this year compared to last year, and owing to the current situation, airfares are expected to rise further this season,” Dhall added.

It is unclear how long the problem will last, especially since the most immediate trigger has been the second crash of a new Boeing 737 MAX 8 aircraft in five months, which has led dozens of countries, including European Union nations, to ban its operations.

On Sunday, Ethiopian airlines flight ET-302 slammed into a field in Addis Ababa six minutes after take-off, killing all 157 on board. It may take weeks, if not months, for the reasons to be determined conclusively and any mechanical or electronic vulnerability to be fixed.

The crisis has also hit international flights. “Following the ban of Boeing 737 MAX in Indian airspace, international inbound flights have been affected: 34 international flights into Mumbai and 12 flights bound for Delhi were cancelled. Grounding of additional planes will further impact fares which were already high this season,” the Ixigo CEO said.

International flights on some sectors, particularly those headed to the United States and Gulf nations, have also been affected by Pakistan’s decision to close its airspace following a military confrontation with India last month.

The government on Wednesday urged airlines not to increase fares, but airlines are not under any legal obligation to do so since pricing is not regulated.

Mark Martin, CEO of Dubai-based Martin Consulting, said Indian aviation was possibly going through its worst phase. “Overall fleet of Indian carriers is down by 20% due to multiple reasons. It will certainly have an impact on fare,” he said.

Last year, at least 30 Airbus A320Neo aircraft were grounded over the 12-month period after concerns arose over flaws in the Pratt&Whitney engines they were equipped with. Earlier this year, DGCA asked airlines not to fly planes of this make to Andamans, a route that puts flights more than an hour away from alternate airports which can be used in case of an emergency.

For now, SpiceJet said it is “rationalising and optimising” the use of its Boeing 737NG and Bombardier Q400 aircraft to minimise inconvenience to passengers. The airline also said that it was adjusting passengers on alternative routes and offering the option of a full refund, change in travel date, or even a change of destination without any cancellation charges or fare difference. The airline has been asked not to take more deliveries of the 737 MAX till problems are rectified.

(With inputs from Neha LM Tripathi in Mumbai)