For the world's fastest growing aviation market that clocked consistent double-digit growth in domestic air passenger traffic on a monthly basis for the last four-and-a-half years, winding down of operations India's oldest private airline has hurt the growth as one in six aircraft have gone out of Indian skies over the past few months.
While Jet Airways has been reduced to a fleet of 14 aircraft, India's total fleet strength of about 670 planes has lost close to 117 airliners, as per industry estimates and official regulatory information. Of these 117 planes, 105 were operated by Jet Airways and are now grounded due to non-payment of dues to lessors, while 12 belonging to SpiceJet are non-operational due to safety issues with the Boeing 737 MAX aircraft.
"The consequent flight cancellations have resulted in around 30-40 per cent increase in airfares over September 2018 to March 2019. However, India being a high price sensitive market, this has impacted the domestic passenger traffic growth from October 2018 onwards, with the Q3 FY2019 year-on-year growth reduced to 12.4 per cent, as against the H1 FY2019 year-on-year growth at 19.8 per cent. In fact, the domestic passenger traffic growth in January 2019 reached a 53-month low of 8.9 per cent year-on-year, and February 2019 was further lower at 5.6 per cent year-on-year," said Kinjal Shah, vice-president and co-head, corporate sector ratings, ICRA.
"The passenger traffic growth for March 2019 is expected to be lower than that in February 2019. Moreover, these issues have raised concerns on passenger safety," Shah added.
Out of a strength of about 670 planes, India has lost 117 airliners in recent months Jet's flights to destinations such as Amsterdam, London, Paris, Singapore, Bangkok were cancelled on Thursday and Friday. In addition to this, a number of Jet's domestic flights were also cancelled.
According to industry sources, the airline is set to operate only five departures from Mumbai, one from Bengaluru and about 20 from Delhi on Friday. A Jet Airways spokesperson said late Thursday: "We have proactively cancelled long-haul west bound departures from India from tonight till tomorrow morning".
According to travel experts, India's air passenger growth over the last three to four years has been led by low oil prices that allowed the airlines to offer cheap fares - a phenomenon that continued even when fuel costs began to rise last year. Due to this, airlines in India started bleeding amid intense competition and rapid capacity addition. "While the increased air fares are likely to support the profitability of the airlines in an environment of high costs, the impact on the passenger growth does not bode well for the industry," ICRA said. Notably, India's largest airline IndiGo, added nearly one aircraft every week during calender year 2018.
Further, Jet Airways' woes have also had an impact on the Centre's flagship regional air connectivity scheme (RCS) to connect unserved and underserved airports of the country. The airline was awarded routes such as Delhi-Bareilly, Delhi-Nashik, Indore-Hyderabad, Nagpur-Allahabad, Lucknow-Allahabad, Patna-Allahabad among various others but the airline's liquidity problems have forced it to operate on a skeletal schedule.