Jet Airways Cuts Flights On 70% Of Domestic Routes

The capacity of domestic airlines is expected to grow at a slower pace in the summer season, typically when travel picks up due to school holidays, as Jet Airways (India) Ltd. will operate on 70 percent fewer routes.

Going into the summer schedule, the full-service carrier cut flights from 174 of the 252 routes it operates in, according to SBICAP Securities that compiled data available with the Directorate General of Civil Aviation. That's because the airline, struggling with a debt of nearly Rs 10,000 crore, was forced to ground more than 90 planes due to non-payment to lessors.

The summer schedule—that begins on March 31 and ends on Oct. 26—of Jet Airways has been approved only till April 25 but there could be a revision. The summer schedule of flights of all other major domestic airlines, according to the document uploaded on the DGCA website, have been approved till Oct. 26.

Passengers, especially those booking at the last minute, will end up paying more, according to Sharat Dhall, chief operating officer (business-to-consumer) at Yatra Online. “For leisure travellers, or those who are booking their tickets well in advance, prices are not likely to be higher by more than 10 percent.” Carriers such as IndiGo and SpiceJet Ltd., he said, are expected to introduce more capacity quickly to normalise the ticket prices.

As Jet Airways pulled out of capacity from more than 70 percent routes, according to the SBICAP Securities report, the daily domestic departures during the 2019 summer schedule is expected to grow at a slower pace of 4 percent compared to last year. Domestic capacity growth of India's largest airline, is expected to fall to 20 percent year-on-year as it shifted its focus on international routes. SpiceJet's capacity is expected to grow 30 percent despite disruptions caused by the grounding of 737 Max aircraft and delays in fresh deliveries.

Curtailing flights by Jet Airways will benefit Tata group-owned Vistara and low-cost Malaysian airline AirAsia the most as they deployed more than 40 percent of their capacity on these routes, the report said.

The cut in capacity of Jet Airways also led to unused slots in key airports in India. Slot reallocation, according to ICICI Securities, will be inevitable if debt resolution of Jet Airways continues to be delayed. IndiGo and SpiceJet remain major beneficiaries of this, the report said. Nearly 65-70 slots in Mumbai and Delhi and eight in Bengaluru are unused.