Even as the aviation sector battles the challenges, especially after Jet Airways crisis, flyers may have to pay extra for tickets, analysts tracking the sector said. The prices are expected to remain higher as the recent groundings have negatively impacted the sector leading to rise in airfares.
“The recent groundings have impacted ~20% of the total industry capacity. The consequent flight cancellations have resulted in ~30-40% increase in airfares over September 2018 to March 2019”, Kinjal Shah, Vice President, Corporate Sector Ratings, ICRA told Financial Express Online.
A recent report by CRISIL had said the air tickets may increase by 10-12 per cent in the quarter ending March as against the corresponding quarter previous year.
Higher prices have even affected the growth of domestic passenger traffic from October 2018 onwards, she said. The growth in the third third quarter of FY19 fell to 12.4 per cent on year as against 19.8 per cent on-year in the first half of FY19, she noted.
“The domestic passenger traffic growth in January 2019 reached a 53-month low of 8.9% Y-o-Y, and February 2019 was further lower at 5.6% Y-o-Y and March 2019 was muted at 0.1%. This is expected to keep the airfares higher in the near term until the airlines expand their fleet”, she also said.
Even the approaching summer holidays may keep airfares at the higher level CRISIL during the first quarter of FY20, CRISIL had also noted in the report. The increase may not be as steep as it was seen in the last quarter of FY19, CRISIL Research, said in the report.
The temporary grounding by Jet Airways and rising crude oil prices have negatively impacted the aviation sector in the last few weeks.
