Turbulent Times Call for Harsh Measures

Passengers are likely to face tough times ahead as Indigo and GoAir have decided to cancel more than 600 flights this month. Indigo has alone decided to cancel around 488 flights. Whereas GoAir has decided to abandon around 138 flights. Both the airlines operate around 1200 flights daily. The impact of this elimination would be more severe when the peak travel season starts in the summer. The decision to cancel flights came after an Indigo flight departing from Ahmedabad for Lucknow, returned to Ahmedabad due to mid-air engine failure within 40 minutes of taking off.

These aircrafts are built-in with Pratt & Whitney 1100 engines. These engines were brought in 2016 to make these flights more fuel efficient and less noisy. As with every new technology, new issues started coming up. “The main problems regarding these engines were longer start-up times and premature wear and tear of two components on the engine. With India’s hot weather conditions, this wear and tear accentuated causing the compressor seal to break mid-air”.

Citing safety of aircraft operations, the DGCA said, “A320neos fitted with PW1100 engines beyond ESN 450 have been grounded with immediate effect. Both IndiGo and GoAir have been told not to refit these engines, which are spare with them in their inventory”.

The DGCA has set out certain norms to be followed in case of cancelled flights and in the current situation, the prohibition of a total of 11 A320 neos, powered by faulty P&W engines have been done after the regulator’s directive. While IndiGo and GoAir have a total of 45 A320 neo planes with P&W engines, 14 of them are on the ground.

Due to these flight cancellations, the finances of IndiGo have taken a hit. The consequences of not adding new A320 planes hasn’t affected much because the other major companies don’t have an expansion plan coming up in the near future. GoAir being such a small player in the aviation market won’t see any disruptions in its market share but would see delay in its international operations which were supposed to start last year.

The decline in IndiGo’s capacity addition has caused its domestic market share to fall to 39.4 per cent in December 2017, against 40.4 per cent in November 2016.
Analysts are predicting that due to disruption in their services IndiGo and GoAir would be required to go on a short-term lease. That these companies would have to lease aircrafts from other companies to provide temporary increase in capacity. This would lead to higher expenses. Short term leases are costly, and their maintenance cost is usually more than a new aircraft.

The cancellation of flights has resulted in the prices of domestic flights to rise. The tickets on the Mumbai-Delhi route flaring upto Rs 12,000 from the usual rate of around Rs 7000-8000 for late bookings. “With current load factors at over 90%, this reduction in capacity is likely to have a 5-10% impact on fares on key routes in the short to medium term,” said Sharat Dhall, COO at travel portal Yatra.com.

IndiGo operates about 1000 flights daily. On an average, IndiGo flies four out of every 10 Indians. Passengers would be facing a lot of inconvenience in the upcoming days as there are no spaces to accommodate in other airlines too as they are running at full capacity.

Karan is a third-year Economics and Finance major. In Economics, the field of Microeconomics is of special interest to him. He enjoys watching and playing sports. He feels it is an escape for him from the world. Whenever his day is not going great he watches his favorite teams play to cheer him up.

Leave a Reply

Your email address will not be published. Required fields are marked *

You don't have permission to register