Vistara operations scale-down pushes up fares by 25 per cent on key routes

As part of the mitigation measures, the Tata group airline announced over the weekend that it was reducing around 10 per cent of its operational capacity — mostly in its domestic network — to provide “much-needed resilience and buffer” in its crew rosters. Given that airfares have been on the higher side for a while now due to a demand-supply mismatch, Vistara’s move has added additional pressure, particularly on the routes impacted by the cancellations.

According to Bharatt Malik, Senior Vice President, Air and Hotel Business at Yatra Online, a “significant surge” has been witnessed in airfares on some of the major domestic routes where the airline has a strong presence. “We have observed a significant surge in fares, with prices skyrocketing by approximately 20-25 per cent across key routes such as Delhi–Goa, Delhi-Kochi, Delhi-Jammu, and Delhi-Srinagar,” Malik said.

Last week, at the peak of flight disruptions at Vistara, same-day and day-ahead airfares are understood to have shot up by over 30 per cent on some major routes hit by flight cancellations, as many among the affected passengers started looking for alternative flights.

An executive at another travel agency said that while the Vistara flight cancellations may be a temporary phenomenon that may last a couple of months, even a short-lived disruption adds to the pressure on the capacity-constrained Indian aviation ecosystem that has been struggling to keep up with strong travel demand since the end of the Covid-19 pandemic. In such a scenario, airfares are bound to heat up.

“Over 70 aircraft of IndiGo are grounded due to engine-related issues and supply chain problems and over 50 Go First planes are idling at airports as the airline filed for insolvency in May last year. There are visible capacity constraints and the airlines seem helpless at this stage. On the other hand, demand growth is not letting up, leading to a skewed demand-supply scenario,” said the executive, who did not wish to be identified.

“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… In line with what we had said earlier, with this all the changes for the month of April 2024 have been done and the situation has already gotten better with our on-time performance improving for the last few days. Looking ahead, we are hopeful of stable operations for the rest of the month and beyond,” Vistara said in a statement on Sunday.

Incidentally, in the Indian airlines’ summer schedule for 2024, Vistara was among the top carriers in terms of growth in approved domestic flights vis-à-vis the preceding winter schedule and last year’s summer schedule.

This year’s summer schedule — March 31 to October 26 — has 2,324 weekly domestic departures by Vistara, higher by 25.2 per cent over last year’s summer schedule and 22.2 per cent over the winter schedule that ended in March. Overall, however, the current summer schedule (for all Indian carriers combined) has 6 per cent more domestic departures year-on-year and 2.3 per cent more sequentially.