Rivals see runways of opportunity as Jet Airways suspends operations

A Jet Airways aircraft waiting at the airport
The suspension of Jet Airways flights has opened new opportunities for competition such as Air India, SpiceJet, IndiGo and AirAsia India. These airlines are ready to fill in the gap, especially in metros, by adding flights both to international and domestic destinations.  

Air India chief Ashwani Lohani, for instance, has offered to take five grounded B 777s of Jet on wet or dry lease, it is learnt. Lohani sent across the offer to State Bank of India chairman Rajnish Kumar, who’s heading the resolution process for Jet, in a communication dated April 17, as soon it was clear that the Naresh Goyal-founded airline was getting grounded. Lohani has expressed the wish to take the aircraft on lease, “subject to approvals and financial viability”, to fly them to international destinations where Jet had substantial capacity. Air India is looking at adding flights to London from both Delhi and Mumbai, a route where fares have soared recently. Also on the horizon are additional flights to Dubai and Singapore. Lohani could not be contacted for comment. 

SpiceJet too announced on Thursday that it was launching 24 new flights connecting Mumbai and Delhi with other cities in the country. Of these, 16 will connect Mumbai (apart from the six it announced last week and which started operations on Thursday) and four Delhi. The rest will connect the two metros with each other. The airline had recently announced direct flights from Mumbai to Dubai, Hong Kong, Riyadh and Bangkok among other international routes. 

It has also approached the government for a no objection certificate for 22 additional aircraft it’s taking on dry lease.

According to aviation sources, SpiceJet has received 16 slots while AirAsia India has got eight in Mumbai. In Delhi, out of the 200 slots, the airport has given out around 50 to Jet’s competitors.   

IndiGo, the largest airline in the country by passengers, is putting in additional 20 flights from Mumbai in a phased manner. It already has over 97 domestic and five international slots in Mumbai. 

Now, it has 20 more in the Mumbai airport. While it did not comment on the slots, the IndiGo spokesperson said, “we are happy  with our current order stream of 430 A320 Neos, of which we have already taken delivery of 74 aircraft till April 17 2019”.        
Indicating a significant upside for listed carriers,  SpiceJet shares surged over 39 per cent from April 1 (as per Thursday’s closing price). 

IndiGo saw its share price zoom 9.7 per cent, while Jet Airways plunged 38 per cent in the same period. Aviation regulator DGCA has been offering temporary slots to airlines till July 15 so that they can utilise those of Jet, especially in Mumbai.

So far, Jet has been the biggest player in Mumbai, controlling over 110 domestic and 30 international slots at the airport. In a meeting with airlines, DGCA has said that priority for slots will be given to new aircraft and airlines. 

It has also advised prudent handling of things while moving existing planes from one route to another. According to estimates, airlines have already been earmarked over 50 slots in Mumbai by DGCA to partly take care of the demand.

Some have also been pushing the government to allow a temporary window for foreign carriers. The idea is to add capacity during the peak May-July season for international travel. An aviation expert said, “It has been done earlier during festival seasons, when demand is higher than supply, and it should be done now so that passengers don’t suffer.”

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel