Why you could be paying more to fly to your summer holiday destination

How’s the summer of 2024 looking as Indian travellers plan holidays? It’s not good news if you are planning to take a flight. One of India’s leading domestic airlines Vistara is facing a crisis – its operations have been marred with flight cancellations and delays over the past few days. Now Vistara has announced a reduction in the number of flights it operates.

With fewer flights, passengers are expected to be affected. Will this lead to a rise in airfares? We take a look.

Why is Vistara reducing flights?

Vistara has announced a 10 per cent cutback in its operations, to reduce chaos following the unavailability of pilots. The airline will be cancelling 25 to 30 flights per day to ease the pressure on pilots.

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“We are carefully scaling back our operations by around 25-30 flights per day, i.e. roughly 10% of the capacity we were operating. This will take us back to the same level of flight operations as at the end of February 2024, and provide the much-needed resilience and buffer in the rosters,” a Vistara spokesperson was quoted as saying by NDTV.

He said that the on-time performance of flights has improved and the airline is hoping for “stable operations” for the rest of April.

Sunday’s announcement came a day after Vistara CEO Vinod Kannan said that 98 per cent of its pilots have signed new contracts with the revised salary structure. However, several of them called in sick to protest against the new pay structure, leaving the airline with no choice but to cancel flights last week. Recently, at least 15 senior first officers have resigned.

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The carrier experienced several operational disruptions over the 31 March to 1 April weekend, leading to numerous flight cancellations. It cancelled more than 125 flights over three days from 1 April.

Discontent has been growing among pilots at Vistara, which will soon merge with Air India. The new work contracts have raised concerns that their fixed pay component is reduced and there are more flying-linked incentives. Pilots are also unhappy with the company’s haphazard rostering practices, which they claim have a serious impact on their work-life balance.

Tata Group, which owns a 51 per cent stake in Vistara — the remaining 49 per cent is owned by Singapore Airlines — announced its merger with Air India in November 2022. After the merger, Singapore Airlines will have a 25.1 per cent stake in Air India, reports CNBC.

Also read: Flight delays, cancellations, crew shortages: What's going on at Vistara?

How the Vistara crisis could lead to an increase in airfare

Vistara claims that last week’s cancellations were mostly in the domestic network and much ahead of time to minimise inconvenience to passengers. “All the affected passengers have already been re-accommodated on other flights, as applicable,” the airline had said.

Now the carrier is expected to operate around 300 flights in the busy summer season. With fewer flights, there could be an increase in airfare.

India has over 3,000 flights per day and even small disruptions can cause temporary increases in airfares, especially since it’s peak summer travel season now, Chirag Agrawal, co-founder of TravClan, a business-to-business (B2B) platform for travel agents, was quoted as saying by moneycontrol.

There has been a gap in demand and supply in the domestic airline sector, which has already led to a 15 per cent increase in airfares. Now prices of flight tickets could increase further. In case of last-minute cancellations by the airline, booking another ticket on the spot is an expensive affair.

“Those who are purchasing tickets now are looking at Air India, IndiGo, and Akasa as there is a lot of uncertainty around Vistara. Vistara is offering passengers refund and alternate flights, but what if someone has a morning meeting and Vistara is offering an evening flight? In that case, people have to make last-minute bookings, which are expensive. Booking a flight in the last minute can increase cost by 10-40 per cent,” Sanjay Dang, the managing director of travel agency Le Travelworld, told moneycontrol.

The troubles with Vistara come at a time when demand for air tickets is higher. During the summer holidays between April and June, many Indians travel within the country. But the surge in demand is marred by supply constraints.

In early March, before the Vistara crisis, Cleartrip’s Chief Business Officer Prahlad Krishnamurthi predicted a seven to 10 per cent increase in domestic fares for the April-June period compared to last year, while Easemytrip witnessed a 60 to 70 per cent hike in airfares, according to The Hindu Businessline.

Officials at domestic airlines told The Economic Times last month that while Indians will be out in full force for the summer season, an inadequate number of flights is likely to trigger a spike in airfares.

Now this is only expected to rise further as Vistara scales down operations.

How the domestic airline industry is facing turmoil

But it is not Vistara alone where pilots are disgruntled. Pilots of another Tata Group-owned airline have complained that they are overworked and underpaid.

“The concerns expressed by the Vistara pilots are not isolated incidents but rather indicative of systemic issues” across Tata’s aviation business, the Indian Pilots’ Guild, which represents crew at Air India Ltd., wrote in a letter to Tata Chairman Natarajan Chandrasekaran, according to a report in Business Standard.

Apart from Vistara, pilots of Air India and the low-cost Air India Express have said that they are made to put in maximum flying hours, have difficulties getting leaves and deal with unstable rosters, according to the letter dated 4 April.

This only threatens to add to the air travel chaos that Indian flyers experienced last week.

Other domestic airlines also have problems of their own. GoAir flights have been grounded, around 72 A320s of IndiGo have been banned from flying because of the snag-hit Pratt & Whitney engines , and SpiceJet is reportedly operating fewer flights.

While there is a rise in the number of passengers, there are not enough planes to fly them.

With inputs from agencies