2 min read.Updated: 26 Jun 2019, 10:39 PM ISTRhik Kundu
Elara Capital's report says this happened during March-June 2019 period
During the same period, IndiGo fetched 32% new slots
Low-fare airline SpiceJet Ltd bagged the maximum number of airport slots vacated by Jet Airways (India) Ltd after its grounding on 17 April, a research report said.
According to an Elara Capital report released on Wednesday, the Ajay Singh-led airline won 43% of these slots in the March-June period at Mumbai and Delhi airports, followed by IndiGo (32%), GoAir (13%), Vistara (7%) and AirAsia India (4%).
“Given Delhi and Mumbai airports comprised 60% 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," Elara Capital said in its report.
“As a consequence, we expect SpiceJet’s market share to rise by 6%, followed by IndiGo at 5% and GoAir at 2%," it added.
Slots at the busy airports in Mumbai and Delhi airports are considered highly valuable since they allow an airline to operate these trunk flights. Airlines submit their schedules to authorities before summer and winter seasons as per International Air Transport Association norms. Slots are allocated based on various factors including the number of aircraft operated by an airline.
With Jet Airways remaining grounded, airports have taken back its slots and given them out to other airlines for 90 days.
On 20 June, the Mumbai bench of the National Company Law Tribunal (NCLT) admitted Jet Airways for bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC).
The tribunal, which will hear the case next on 5 July, ordered the insolvency resolution professional (IRP) to complete the IBC process in three months, even though the law allows six months, saying “the matter is of national importance".
Going ahead, Elara Capital expects a 5-6% market share gain each for SpiceJet and IndiGo, along with strong margins for both airlines.
At Delhi and Mumbai airports, SpiceJet’s slots would increase by 70% of current slots in the coming months (as compared to the previous winter schedule) while IndiGo’s slots would increase by 14% during the same period, the report said, adding Vistara and GoAir’s slots will increase by 10% and 8%, respectively, during the same period.
“Delhi and Mumbai slots handle 60% of air traffic, of which Jet Airways had a sizeable 24% of total slots," the report said, adding that about half of all Jet Airways slots at Delhi and Mumbai have already been offered to other carriers.
Mint had earlier reported that about 500 of 810 slots at airports across the country that were earlier allocated to Jet Airways have been allocated to other airlines for a period of three months.
If Jet Airways revives and is able to maintain the same fleet size as before, slots would be returned to them, a civil aviation ministry official had earlier told Mint.
“If Jet Airways is unable to revive, the incumbents utilizing the slots will be given preference during slot reallocation process," the person had added, requesting anonymity.
“Till December 2018, the expansion of flights at metro airports have been significantly constrained on account of unavailability of slots. The impact is even more pronounced at key airports such as Mumbai and Delhi due to congestion. This has restricted route additions at these airports. With the grounding of Jet Airways, their slots at these major airports are being made available to reduce the disruption to passenger traffic. This is expected to support capacity expansion of other players without any pressure on the yields in FY20," said Hetal Gandhi, director, Crisil Research. “During Fiscal 2019, airlines operated about 25-27% of their total domestic flights from Delhi and Mumbai airports."
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