There are two kind of people around the world, those who buy their air tickets basis the lowest price, and those who buy their air tickets basis the best their money can buy. Both approaches are fine as long as you get across to where you need to be. However, the COVID-19 pandemic has caused havoc with airline finances, and hence you should go for quality over price.
When COVID-19 was declared a pandemic in March 2020, it led to a grounding for over two months for all Indian carriers. Airlines were forced to refund customers for the cancelled tickets. Airlines are a money-intensive business, so they generate cash every day and pay their dues. An airline seat not sold is a perishable product.
When airlines could not operate, there was no income, and expenses lined up (including lease costs, salaries and so on). This got airlines on to a cost cutting spree where they did everything they could to slash costs, including getting their crew to take salary cuts. They also did not refund customers, instead giving them vouchers and asking them to use these for travel later.
How airlines dealt with COVID-19 cancellations
Various airlines have come back differently out of this near-death situation. IndiGo and Vistara are two airlines who have refunded almost everyone, but there are others such as Air India and SpiceJet who have been extending the credits and not refunding to the customers despite follow-ups.
Running an airline in India is not for the faint hearted, and almost every airline is running a loss. But the good ones are still finding financial backing from their promoters. Which brings me to the point of always looking into the airlines financials before you think of booking a ticket with them. After all, you don’t want to have your money go belly-up like when Jet Airways shut shop.
Go First (previously GoAir), ran a loss of Rs 470.29 crores in the period between April – December 2020, and had a consolidated loss of Rs 1,689.94 crores for the three…