The crisis at Vistara sparked off by pilot rebellion may be stabilising, but that may not be enough to spare the Indian air passenger from spiralling airfare woes this summer, for the second year in a row. A combination of factors, some global and some domestic, have come together in a sort of perfect storm that could well engulf Indians hoping to travel in the upcoming peak summer vacation season of May-June.
First, the good news, for whatever it’s worth. Vistara flight operations seem to be limping back to normal, with CEO Vinod Kannan announcing to staff members that “the worst is behind us.” Silently starting by the fag end of March and bursting over the unsuspecting sector in the first week of April was a spate of flight cancellations by the full-service airline owned by Tata Group and Singapore Airlines. The reason? The pay restructuring ahead of its impending merger with Air India had pilots unhappy and going on mass leave. For example, on April 1, reports indicate that the airline cancelled 50 flights while more than 160 were delayed. The beleaguered airline was forced to trim its services by 10% for the rest of the month, meaning around 1,000 flights will be cancelled by the time April is through.
The domino effect of Vistara’s cancellations, even though it has less than 10% market share, was immediate, with airfares shooting up across the nation’s domestic network, an impact that is continuing even if Vistara operations may be close to stabilising. Routes like Delhi-Bengaluru, Delhi-Ahmedabad, Ahmedabad-Patna and Delhi-Srinagar seemed to be the worst affected, though rates had increased across the board.
For example, an analysis by travel aggregator ixigo showed that fares on certain airlines went up by 39% in the first week of April compared to the same period just one month ago.
Unfortunately, even if Vistara services stabilise by May, it may not be enough for airfares to remain steady and not shoot up. One of the main reasons would be oil prices shooting up again in the past few weeks — Brent Crude was trading above 90 dollars per barrel when markets closed on Friday, up 18% since the start of 2024, and it is anybody’s guess how much it will go up if the feared Iran-Israel skirmish blows up into all-out war.
Other reasons range from rupee depreciation, as well as the fact that many aircraft have been grounded over engine and spare part issues. Market leader Indigo alone has some 74 planes grounded, with a market estimate putting the total number of planes not flying in India due to various reasons (including those of grounded airline Go First as it waits for a saviour) at about 200.
While the sudden grounding of Go First right at the beginning of the peak summer vacation season in early May last year was the catalyst for fares to shoot through the roof last year, factors from Vistara to oil to grounded planes — even as demand for air travel has been growing across the country, could well prove to be a dampener this year around.
Even though a parliamentary standing committee had recommended two months ago that airfares be capped according to routes and that a regulatory body be set up to monitor fares, no measures have been taken by the civil aviation ministry which is in favour of market forces and self-regulation. Not good news for the middle-class Indian hoping to fly out this summer, though.
