Jet Airways’s temporary shutdown will drive airfares upwards as the airline had a 15% domestic market share in October last year. It slipped to 11.4% in February this year. Its flight share in top-10 city-pair routes was 24% and it accounted for 14% of India’s international airlines capacity share.
While other airlines will try to lease aircrafts and drive up capacity, it may not be enough to fill the vacuum left by Jet. The extent of the price increase, especially in the peak season of May and June, will depend on the quantum of capacity that the industry adds collectively to ease the demand-supply mismatch. In fact, airfares have been increasing since October last year because of capacity reductions by Jet Airways, grounding of MAX aircrafts by SpiceJet and Indigo’s pilots shortage.
Air Asia and Air India have added the most flights after the disruption of Jet Airways followed by Indigo and Vistara. SpiceJet has not been able to add capacity because of grounding of 13 Boeing Max 737 out of total 75 aircraft.