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Airfare alert! How flight cancellations impacted Indigo, Jet Airways and others - Flight ticket prices set to 'fly'? Analysis here

Although other airlines like SpiceJet, GoAir, Vistara, AirAsia and Air India faced some heat of flight cancellation as well, but Indigo and Jet Airways suffered most.

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Airfare alert! How flight cancellations impacted Indigo, Jet Airways and others - Flight ticket prices set to 'fly'? Analysis here
Indigo still continues to be the largest airline, as its market share rose to 42.5%, whereas Jet Airways saw drop. Photo: Pixabay

In the first month of 2019, both Indigo and Jet Airways witnessed impacts of heavy flight cancellation due to weather conditions, few airport maintenance and internal issues. This time, in January 2019, both the airlines saw drop in their passenger load factor and on-time performance, reason was because of rise in flight cancellation. Although other airlines like SpiceJet, GoAir, Vistara, AirAsia and Air India faced some heat of flight cancellation as well, but Indigo and Jet Airways suffered most. However, Indigo still continues to be the largest airline, as its market share rose to 42.5% in the latest month, whereas Jet Airways saw drop in share to 11.9%. In previous month, Indigo and Jet Airways market share stood at 41.5% and 13.8% respectively. 

In January 2019, domestic airlines carried 12.5 million passengers (PAX), implying a multi-year low growth of 9.3% YoY. Indigo witnessed the highest domestic PAX growth at 16.8% YoY to 5.3 million, while SpiceJet carried 1.7 million PAX  up over 15.1% YoY. Jet Airways + Jet Lite and Go Air witnessed a decline in PAX, as they carried 1.7 million and 1.1 million passengers which was down by  9.8% YoY and 0.7% YoY respectively. Interestingly, Air India witnessed PAX growth at 11.7% YoY to 1.5 million.

Overall cancellation rate in the month was at 1.81% of these airlines. Interestingly, Air India’s cancellation rate was at 2.79%, followed by Indigo at 2.42%, Jet Airways at 1.54% and JetLife at 1.24%. Airlines like SpiceJet, Vistara and GoAir saw cancellation rate at 0.81%, 0.80% and 0.12% respectively. 

About 50.5% of the reason for cancellation were weather condition, while 12.8% was due to operational and 8% technical. 

Due to cancellation, Indigo’s 12800 passengers were affected, while Jet Airways including Jet Life’s 7,417 passengers were impacted. This was  followed by SpiceJet and Vistara whose 6975 and 2626 passengers were impacted respectively. 

#10KiKamaai में जानिए मार्केट एक्सपर्ट कुणाल सरावगी और राकेश बंसल ने आज फाइजर में किन लेवल्स पर दी निवेश करने की सलाह।@AnilSinghviZEE @deepaliranaa @kunalsaraogi @iamrakeshbansal pic.twitter.com/XOPdkz15gc

— Zee Business (@ZeeBusiness) February 27, 2019

Analysts at JM Financials said, “Flight cancellations for Jet Airways also increased by 0.8ppt YoY to 1.5%. In terms of PAX complaints, both Indigo/SpiceJet performed better than the industry average and reported 0.6/0.4 complaints per 10,000 PAX, respectively.”

Thereby, on-time performance of Indigo stood at 64% in January, whereas Jet Airways plus Jet Life’s at 63.1%, Air India at 56.6%, SpiceJet at 69.2% and Vistara at 75.3%. While GoAir was leader in this section with growth rate of 75.9%. 

Talking about the performance, analysts said, “Indigo’s capacity addition was driven by pickup in deliveries of A320 neos (inducted 27 A320 neos in past six months). Domestic PLF came in low across major airlines with Indigo and SpiceJet witnessing 3.3ppt and 4.1ppt YoY decline. Indigo/Jet Airways reported high flight cancellations at 2.2%/1.5% vs. industry avg. of 1.8%, while on-time performance remained low across airlines driven by adverse weather conditions.”

Interesting, in JM Financial’s view, fares in Feb’19 and Mar’19 are expected to remain strong on supply constraints driven by infrastructure bottlenecks (run way maintenance) at key airports. Ability to pass increasing fuel/INR related costs will be a key monitorable.

 

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TAGS:
IndiGoJet AirwaysAviation
Written By: ZeeBiz WebTeam
Updated: Wed, Feb 27, 2019
12:38 pm
Mumbai, ZeeBiz WebDesk
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