Jet grounded, international fares take to the sky

MUMBAI: The slump in international capacity created by the grounding of Jet Airways has led to a steep rise in overseas airfares, said executives at airlines and travel companies.Flights to destinations such as London, New York and Toronto have seen the biggest increase. For instance, fares on the Mumbai-New York route rose as much as 157% between March and June, according to data compiled by travel portal Cleartrip.Jet Airways suspended all operations on April 17, having run out of money to operate, although it had been cancelling flights all year before that. Until December, it operated close to 120 daily international flights, which contributed about 60% of its revenue. The abrupt stoppage had meant that some planes were unable to make their scheduled trips back to India. “There has been a major decline in capacity, especially in the medium-to-long haul sectors and we have seen a significant spurt in pricing,” said Rakshit Desai, managing director at FCM Travel Solutions, a corporate travel company. “Sectors such as Mumbai-London, where Jet had as many as three daily flights, have been deeply affected. Leisure travellers, especially those booked on Jet earlier, have suffered the most as they have had to rebook their flights at the last minute at steep prices.”The sharpest rise has come in upper class ticket fares, he said. “It has been difficult to get tickets — business class fares on almost every long-haul sector have more than doubled,” said a top executive at a low-fare carrier. The ministry of civil aviation last week gave away close to 400 international arrival and departure slots to Jet’s rivals. 69997325 Half of them went to state-run Air India, the country’s only carrier that has long-haul operations.The other half were allocated to low-fare carriers led by market leader IndiGo. The government has done the same with Jet’s domestic slots. Local fares too have been rising after Jet’s grounding of flights. But there will be some moderation in these after rivals add capacity to fill the gap.Experts said it won’t be the same for international routes. Low-fare carriers operate to short-haul destinations such as those in the Gulf and Southeast Asia. Air India, itself cashstrapped, has had to ground several planes for lack of spares and will find it difficult to quickly add capacity to capture Jet’s market. Foreign carriers, except in the case of the US and UK, are constrained by bilateral agreements. And, American and British carriers aren’t expected to quickly add capacity to serve the Indian market.Also, Jet had built up a network of partnerships with about 150 foreign carriers over the years.“Jet’s passengers had access to a massive codeshare and interline network built over the course of more than two decades. All of that is wiped out and will take years to replicate or build,” said Manish Dureja, managing director of Jet Privilege, the loyalty programme jointly owned by Jet and its 24% partner Etihad Airways. Dureja was earlier vice president of marketing for Jet.The airline is currently undergoing bankruptcy resolution after attempts to come up a rescue plan failed.

from Economic Times https://ift.tt/31WHldC
via IFTTT