As Jet remains grounded, Indian airlines are increasing their fleets to rein in surging ticket prices

• Last week, a cash-starved Jet Airways decided to temporarily suspend operations after its creditors refused to give into its requests for emergency funding.
  
• In the immediate aftermath of the move, domestic airfares surged by as much as 200% owing to capacity constraints and the fact that a number of prime flight slots were now empty.
  
• As they get Jet’s flight slots, domestic airlines have no choice but to increase the size of their fleets to meet their flight commitments.

Last week, a cash-starved Jet Airways decided to temporarily suspend operations after its creditors refused to give into its requests for emergency funding.

In the immediate aftermath of the move, domestic airfares surged by as much as 200% owing to capacity constraints and the fact that a number of prime flight slots were now empty.

This only served to hurt consumers, as they were forced to book flights at high prices while waiting for refunds from cancelled flights.

That was expected. But even before Jet’s grounding, the Directorate General of Civil Aviation (DGCA) has asked domestic airlines to keep flight prices in check, given that at least 11 routes had seen average fares increase by more than 10% year-on-year.

As 90% of Jet’s slots were unused, the process of allocating them to other airlines was also underway.

As they get more flight slots, domestic airlines have no choice but to increase the size of their fleets to meet their increased flight commitments.

In fact, instead of a planned addition of 80 planes at domestic carriers, the number has recently been increased to 150 - a third of which will be added at market leader Indigo.

Air India is currently in the process of securing some planes that were leased to Jet for both international and domestic routes, having written to the State Bank of India for permission to do so. AirAsia is also reportedly adding 14 planes this coming quarter.

Meanwhile, both SpiceJet, GoAir and Indigo have also moved to lease more planes and add more flights. Spicejet alone has hired hundreds of Jet’s former employees. An estimated 20,000 employees were without work when the airline shut operations.

Jet’s suspension is expected to last until the creditor-led bidding process for a majority stake in the airline is completed. However, if the bidding process fails to unearth a serious bidder - which is a possibility given the fact that Jet isn’t operational - the airline might have to undergo liquidation proceedings.


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