Jet Airways crisis: Allocation of airline slots to continue till October end

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New Delhi | Published: June 21, 2019 3:02:44 AM

With lenders taking the insolvency route to decide the fate of Jet Airways, the government has extended the allocation of the grounded carrier’s slots to other airlines till October end.

Jet’s lenders led by State Bank of India (SBI) could not find any suitor to pick up majority share in the carrier when it was put on the block.

With lenders taking the insolvency route to decide the fate of Jet Airways, the government has extended the allocation of the grounded carrier’s slots to other airlines till October end.

A senior government official told FE that Jet’s domestic and international slots, majority of which are now operated by rival carriers, will be reviewed at the end of the ongoing summer schedule.

“The interim allocation of slots will continue till October end. The insolvency proceedings are expected to take time. Jet will have the first right over these slots in case it gets revived,” the official said.

The ministry of civil aviation had allocated slots held by Jet at various airports, including Delhi and Mumbai, for an interim period of three months, hoping for Jet to find an investor. Last month, international flying rights to countries such as UAE, Qatar, Singapore, Thailand and Bangladesh were distributed between IndiGo, SpiceJet, Air India, GoAir and Vistara on interim basis.

While these airlines have introduced more than 200 new flights on domestic routes since Jet’s closure, filling up international capacities is likely to take time.
Budget carrier SpiceJet alone has added more than 100 new flights, majority of them connecting the key metro cities of Mumbai and Delhi, in May.

“Most of the domestic capacity lost as a result of Jet’s closure should be restored by the end of the Q2(FY19), with growth resuming in the second half. However, recovery in the international sector may take 1-2 years,” aviation consultancy firm Capa India noted.

The Mumbai-based carrier ceased all operations on April 17 due to financial crunch. This led to massive gap in capacities in the market leading to sharp rise in airfares. Jet served over 50 destinations including 19 overseas locations with around 600 daily flights.

Jet’s lenders led by State Bank of India (SBI) could not find any suitor to pick up majority share in the carrier when it was put on the block.

According to CAPA India, Jet’s seat share capacity from Delhi and Mumbai was 15.8% and 31% respectively during January 2019. On international routes, Jet held 14.5% of the traffic from Delhi while the overseas share from Mumbai was at 28.5% in January this year.

The government is likely to assess the performance of these airlines while preparing the winter schedule.

“Not all airlines would be able to exhaust slots on domestic and international routes. We will have to see how many slots are being operated and then decide on the ones to retain or take them away,” the official added.

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