Crisis in aviation biz not to deter travelers

Summer vacation is the peak season that travel industry looks forward to every year as it can do brisk business and cash in on increasing demand. It is the time when parents with children getting school holidays, look forward to embarking on leisure journeys.

However, the turbulence in the aviation industry with major airlines like state-owned Air India, Jet Airways and Indigo facing one crisis or the other, has put travelers in a tight spot.

The Jet Airways bail-out plan from financial crisis along with Indigo airlines which informs to continue recruiting expats and out-of-job pilots, is a positive sign for air fares to stabilise by next month end, which might result in a greater number of flights in the air.

"Right now, the situation with domestic airline industry is that the prices will increase, and the time has come when everyone has woken up to the fact that airlines cannot survive making such big losses.

They will have to increase the fare to cover the loss in revenue. That is the trend right now. Besides, the demand for flight ticket from travelers is not going to go down. People are still going to travel as they can afford to pay more," says a representative of a travel body.

Speaking with The Hans India, Vijay Mohan Raj, Managing Director, Sameera Travels and International Director, Skal International, says, "The competition between airlines has led to price war.

They have not been fixing the prices in the right manner. The range of fares for a flight route filed by airlines with the DGCA is Rs 3,000 to Rs 25,000. I know of a person who bought a ticket on Vistara for Rs 21,000 which was sold a week back for Rs 5,000."

According to him, "the biggest culprit here is the online travel agencies (OTAs) which provide discounts on air tickets under deals with credit card providers and others. This increases the competition further to provide discounted fare, leading to losses for airlines."

In the data available on Airports Authority of India, Rajiv Gandhi International Airport in Hyderabad witnessed 17,61,260 arrival and departure traffic of domestic and international passengers in February 2019, a 12.4 per cent increase compared to 15,67,507 in the same month last year.

India has mainly eight domestic airlines - Indigo, Jet Airways, Air India, Spice Jet, Vistara, GoAir, TruJet, and Air Asia India.

According to a source, nearly 50 per cent of traffic outbound from Hyderabad is dominated by the budget carrier Indigo. Jet Airways which had 13 destinations flying out from this city in the past, now operates to just two destinations, with 13 of their flights grounded here.

With the global ban on Boeing 737 Max 8 planes from March, these aircrafts grounded from this city are two from 2 carriers. The major impact for travelers flying out from Hyderabad airport is from the random cancellation of Jet Airways flights."

Early birds who booked their flight plans prior two months (except on Jet Airways) are on the safe plane, however individual travelers on official trips or with holiday plans on cards are facing the tune.

Sharing his experience, Ashis Nayak, a customer says, "Last Saturday, while flying to Mumbai from Hyderabad, my company which had booked a travel through Jet Airways had to look for other airlines with last minute cancellations from Jet."

Furious about the incident, he says that the airline is not even bothered to inform about cancellations before the traveler reaches the airport.

"Domino effect can be clearly witnessed in such scenarios, wherein upon flight cancellation the airlines would refund the amount but the hotel booked for stay will not refund our money or if on an official visit, I would not be able to reach for my meeting in the other city, as the company would not be able to get a ticket with other airline, despite shelling out high fare in the last minute," he added.

It is expected that air ticket prices are set to rise when there is a shortage. With the surge in air fares, travel package providers and aggregators are bound to adjust their pricing accordingly.

"Subsequent to the fare increase the industry has been witnessing since the last month, we see a further 10-20 per cent average increase in fares when compared with fares last week.

The rise is more acute between major locations. For instance, for Pune-Bangalore last-minute fares (less than seven days) are up by 44 per cent, for Pune-Delhi advance fares are up by 28 per cent," informs Balu Ramachandran, Distribution Head, Cleartrip.

Commenting on the current aviation industry, the International Director of Skal International calls for an industry-wide initiative wherein the airlines should discuss about the minimum bracket they should get to cover their all expenses including distribution costs.

"This is the moment when DGCA (Directorate General of Civil Aviation) has to work out on a model wherein a minimum price is set, sector wise. Like, 15-20 years back, there were fixed prices for each sector.

They should have a minimum threshold, for the pricing of each flight routes and the tickets should be sold above that price, not below that," he suggests.The Jet Airways bail-out plan and recruitment drive of Indigo Airlines augurs well for the industry which will restore some order in the skies, say experts