Thursday, June 27, 2019

‘SpiceJet, IndiGo gain most from downfall of Jet Airways; market share likely to rise by 5-6 per cent’

In the aftermath of collapse of Jet Airways, the Ministry of Civil Aviation temporarily reallocated over 2,500 of the airline’s slots, including prime ones in airports such as Delhi and Mumbai. On the back of these new slots, a research report by securities firm Elara Capital said, the market share of low-cost carriers SpiceJet, IndiGo and GoAir are expected to go up by 6 per cent, 5 per cent and 2 per cent, respectively.

Owing to a financial crunch, Jet Airways suspended operations on April 17, and was admitted by the National Company Law Tribunal for bankruptcy proceedings under the Insolvency and Bankruptcy Code on June 20. The civil aviation ministry, in order to prevent a sudden crunch in capacity leading to a rise in fares, reallocated Jet’s slots to other airlines for three months. A senior government official had said that the slots would be returned to the airline in case it was able to get back up.

The research report noted that about 43 per cent of the slots vacated by Jet Airways in Delhi and Mumbai were picked up by SpiceJet, while 32 per cent were allocated to IndiGo, followed by GoAir at 13 per cent, and Vistara and AirAsia India at 7 per cent and 4 per cent, respectively. “Given Delhi & Mumbai airports comprised 60 per cent of domestic passenger movement during FY19; we believe these two airports are proxy of all-India market share gain by carriers at the expense of Jet Airways,” the report pointed out, adding that the grounded airline used 24 per cent of the slots at the two largest airports in the country.
27/06/19 Pranav Mukul/Indian Express
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