The change of guard at Jet Airways last month was expected to ease things up for Indian flyers during the peak summer travel season. The new owners, a clutch of banks, had told the government they plan to add 40 more planes and restore 80% of the carrier’s capacity, thus helping bring down airfares.
That respite, the banks have said, could take till the end of April when half of the annual school summer vacations is over.
India’s oldest private airline till recently commanded between 15% and 18% of all seats in the market. Now, almost two-thirds of its listed seats are unavailable, said Ashish Nainan, an aviation analyst at CARE Ratings. Of its 119 aircraft, only 35 are flying after lessors took back their planes over non-payment of dues.
“For travel in April and May, the fares are higher by 10-15% on an average, compared with the same time last year,” Balu Ramachandran, head of air and distribution at travel bookings website Cleartrip, told Quartz in an email. “The pressure on airfares is likely to ease out (only) once the capacity (at Jet) is reinstated.”
Banking on the banks
On March 26, after months of scouting for an investor, Jet’s founder, Naresh Goyal, stepped down from his post as chairman. Domestic creditors, led by the State Bank of India (SBI), have taken control. They now aim to sell their stake by May.
Jet hasn’t paid its pilots and engineers in months. On March 30, in a bid to quell the anger among pilots who had threatened to stop work, the lenders paid their salaries for December.
“Irrespective of whether the banks are able to get the planes back from the lessors, if the pilots and the ground staff don’t support them, then all of the 119 planes (in Jet’s fleet) will go off the inventory,” Nainan said.
With still no clarity on paycheques for the past three months, the pilots have refused to call off their plan to cease work. Now it has merely been postponed to April 15. “We are simply going to say that till the time you clear our salary, we are not going to come to work,” a senior office-bearer of the National Aviators Guild, the union of Jet’s pilots, said on the condition of anonymity.
Given the hazy timeline of Jet’s return to normal operations, flyers are staring at hot fares throughout the summer.