Thursday, May 30, 2019

Indian Airlines' Fortunes Turn following Jet Airways Failure

 - May 28, 2019, 11:50 AM

A Jet Airways-configured Boeing 737-800NG now donning the SpiceJet logo prepares to taxi at Delhi International Airport. By Neelam Mathews (copyright)

India’s domestic carriers have found a temporary respite in their failing financials and capacity shortfall following the grounding of Jet Airways in mid-April. The reduced capacity and high demand in the market has provided an opportunity for domestic carriers to raise fares. The Jet shutdown has also given access to its slots at space-constrained airports, including Mumbai and Delhi.
“Guidelines mandate only airlines that add aircraft have access to those slots,”  Vishok Mansingh, director of Mumbai-based consultancy CAV Aero, told AIN. “SpiceJet and Vistara, as a result, have been quick to take Jet Airways aircraft on lease to get the slots.”
Jet’s misfortune has advantaged virtually all airlines in India. With 19 Boeing Max 8s grounded, Spicejet in the past month and a half has already inducted 13 Jet-configured Boeing 737NGs. In fact, SpiceJet plans to take over the leases on all 26 of Jet’s aircraft. Meanwhile, Tata-Singapore Airlines-owned A320 operator Vistara plans to take between 10 and 15 of Jet’s Boeing 737s on short-term lease. “This has helped in getting slots at airports,” said Mansingh. “Already, Vistara has increased its daily frequencies to five from Delhi to Bangalore.”
Following IndiGo’s earnings call early this week, CEO Ronojoy Dutta acknowledged Indian airlines have endured a tough fiscal year because of high fuel prices, a weak rupee, and an intensely competitive environment. “However, it is a tale of two halves for IndiGo, with the first half of the year incurring losses and the second half of the year experiencing a sharp recovery,” he said, attributing the improvement partially to Jet Airways’ cessation of services. “Overall for the quarter, we think that the Jet Airways failure effectively increased our unit revenue by 3- to 4 percent,” he said. “April revenues have been stronger than even March.”
Dutta said that as airlines add capacity to Jet Airways markets, its shutdown effects would dissipate by June “except in a few international markets, where we overlapped with Jet, as in the Middle East.”

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