Monday, February 11, 2019

Partial closure of Mumbai airport could improve yields for airlines

Mumbai: While passengers have to shell out more to fly to and fro from Mumbai, airlines might see an increase in yield owing to the partial shutdown of Chhatrapati Shivaji Maharaj International Airport for maintenance.

The airport will not operate flights between 11 am and 5 pm on Tuesdays, Thursdays and Saturdays from February 7 to March 30. This is having a major impact on airline passengers as about 30 per cent of domestic passenger traffic originates or terminates at Mumbai airport.

Hetal Gandhi, Director, CRISIL Research, said, “After declining by about 5-7 per cent year-on-year during the first half of fiscal 2019, we expect fares in second half to be flattish. Fares are expected to be higher by around 0-2 per cent in the last quarter of the fiscal. This will result in full year fares to decline only by about 2-4 per cent as yields are expected to be better during Q3 and Q4.”

“This is supported by festive demand in Q3 and runway shut-down on about 40 per cent of the days in February and March at Mumbai airport due to runway repairs in Q4. With the decline, we expect domestic passenger traffic to grow a notch lower at 16-18 per cent in FY19,” Gandhi added.

According to an airport spokesperson, on a daily basis, the airport sees 1.5 lakh passengers and on an average about 230 flights will be cancelled in a day. The main routes that will be impacted are Delhi (33 flights), Goa (18) and Bengaluru (16).” Thomas Cook and Cox & Kings believe the fares will go up by 15-20 per cent. However, predicts an increase of fares by 30-40 per cent. Cleartrip believes that the shut-down could lead to a hike between 70 and 100 per cent. “The capacity would have reduced by 15 per cent, which is going to impact the airlines and flyers as well. Passengers need to plan in advance,” said Sharat Dhall, COO, Balu Ramachaandran, Head of air and distribution, Cleartrip, said that customer queries have increased and, “We are working with the customers and the airlines to make sure issues don’t impact them. We expect to see a decline in ‘close to date of departure travel’ by 20-25 per cent due to the fare hike.”
11/02/19 Forum Gandhi/Business Line
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