Domestic airfares in India are unlikely to see a sharp rise in the coming months despite Vistara scaling down operations amid its ongoing pilot contract crisis, industry experts and government officials told Moneycontrol.
"Despite Vistara reducing capacity by around 30 daily flights domestic airfares are unlikely to see a sharp rise in the coming months as overall capacity in the coming months will be much higher when compared to last year when Go First shut down at the start of May," a senior government official told Moneycontrol.
As part of the ongoing summer schedule, which started on March 31, domestic airlines had planned to increase domestic flying capacity by 6 percent, or 1,368 weekly flights, the government official said, indicating that Vistara's plans to cut around 200 weekly flights are not expected to have a major impact on fares.
Vistara’s troubles
Last week, Vistara, the country's second-largest carrier in terms of weekly capacity, announced that it is reducing capacity by 10 percent, or around 25-30 flights daily.
Vistara said in a statement that the cancellations are being done on the domestic network mostly and ahead of time to avoid inconvenience to fliers.
Since March 24, Vistara has seen cancellations escalating due to pilots taking sick leave en masse to protest the terms of their new contracts following the airline's merger with Air India. However, Vistara’s management has maintained that flight cancellations and delays were due to crew unavailability.
"If airfares keep rising in the coming few months the government will intervene, but so far we do not expect fares to rise sharply in the coming months," the official said.
He that the spike in airfares seen between the first week of March and the first week of April was on account of a rise in domestic air traffic due to seasonal factors like back-to-back holiday weeks from Holi, Easter, and Eid falling close to each other this year.
The government officials added that a rise in corporate travel around the end of the financial year coupled with Vistara being forced to cancel flights has also led to a spike in airfares temporarily, which will likely stabilise in the coming few weeks.
Travel agents wary
However, travel agents and online travel platforms are more cautious of airfares rising in the coming months.
"Any curtailment of capacity is bound to impact fares, which are already high. If the issue is not resolved urgently it does not bode well for the upcoming summer holidays," said Ajay Prakash, Board Member, Federation of Associations in Indian Tourism & Hospitality (FAITH), the apex body of the tourism and hospitality industry.
Similarly, data from the travel platform IxiGo shows that spot airfares in the first week of April on major routes like Mumbai-Delhi, Delhi-Bengaluru, and Delhi-Srinagar have risen around 8-30 percent when compared to the first week of March. However, when compared to March 18-24, spot airfares in the first week of April on these routes have risen marginally and even fallen on some routes.
Local travel agents have also noted that last-minute flight premiums due to flight cancellations can be 15-20 percent higher depending on when the original tickets were booked.
If a passenger had booked flight tickets a month in advance which got cancelled a day before the scheduled travel time, booking an alternate flight could even lead to paying a 100 percent premium for the last-minute booking.
Harried flyers
Vistara has several operational disruptions from March 24 to April 4 weekend, leading to numerous flight cancellations. It cancelled more than 125 flights over three days from April 1.
The cancelled flights have left passengers angry and discontent, with many taking to social media to complain about the airline.
Online travel platform Cleartrip has so far received over 470 cancellation requests for Vistara.
Tushar Kanwar, a senior IT industry professional, had travel plans with his family which did not go as planned.
The family of three travelling from Bengaluru to Delhi dealt with a lot of uncertainty when their Vistara flight scheduled for April 6 was cancelled.
“That was a time of a lot of uncertainty, not something one would want for a family vacation in an already expensive sector. These cancellations made one doubt till the last minute if they were actually going to fly, Kanwar said.
Similarly, Rohan Vashist, a 23-year-old who works with a marketing team of an investment platform, shared the ordeal he faced due to the ongoing Vistara issue.
“Recently, I had a frustrating experience with a Vistara flight from Mumbai-Delhi which got cancelled without any notice and I found out about the cancellation when I was doing my web check-in," Vashist said.
He added that upon realising that his flight had been cancelled, he contacted customer support who claimed to have sent me an email regarding the cancellation.
"...but I had not received any such communication. Although they failed to apologise for the oversight, they did offer to reschedule the flight or give a refund. Now, considering the last-minute exorbitant flight prices I settled for rescheduling. Consequently, they accommodated me on another flight a few hours later than my original flight booking time. The lack of communication from the airline was frustrating. While the flight was rescheduled, it still was later than the original flight time which affected my commitments for the day,” Vashist said.
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