New Delhi: The recent cancellation of flights by the no-frills carrier Go First and its filing for insolvency proceedings has sent shockwaves through the airline industry in India. The move is expected to reduce capacity in the industry, which could lead to higher airfares on certain routes. The Travel Agents Association of India (TAAI) has expressed concern over the impact that this will have on the industry, given the fragile state of the sector.
Go First has been bogged down by a severe financial crisis due to the grounding of more than half of its fleet amid P&W engine supply woes. This has resulted in the cancellation of flights for three days starting May 3. The Wadia group-owned airline has also filed for voluntary insolvency resolution proceedings under the Insolvency and Bankruptcy Code (IBC). These developments are worrying for the industry, given that we have already seen the loss of millions of rupees in Kingfisher Airlines and Jet Airways due to insolvency.
The cancellation of flights and reduction in capacity could not have come at a worse time for the industry, with domestic air traffic on an upward trajectory. The summer schedule, which starts from a March 26 to October 28, has Go First operating 1,538 flights per week. With the reduction in capacity, airlines that are still flying could be forced to raise their fares, making air travel more expensive for passengers.
The TAAI has warned that this could be just the startof the problems for the industry, with the ongoing pandemic causing a decline in air travel. The industry is still trying to recover from the losses incurred due to the pandemic, and the cancellation of flights by Go First is a setback that will have far-reaching consequences.
The impact of the cancellation of flights and the insolvency of Go First is not just limited to the airlines and the passengers. Travel agents who have already booked tickets for their clients are now in a difficult situation, as they are unsure if their clients will get refunds. According to TAAI President Jyoti Mayal, it is the responsibility of the airline to provide refunds for booked tickets. However, if the airline goes into insolvency, the rules governing refunds will be different, which will create challenges for the travel agents and their clients.
In conclusion, the cancellation of flights and insolvency proceedings by Go First is a worrying development for the airline industry in India. With domestic air traffic on the rise and the ongoing pandemic still impacting air travel, the reduction in capacity could lead to higher airfares on certain routes. The TAAI has warned that this could be just the start of the problems for the industry, and the impact of the cancellation of flights and the insolvency of Go First will be felt far and wide.
