As Go First cancellations reduce capacity, airfares likely to increase: TAAItext_fields
New Delhi: No-frills carrier Go First's decision to file for bankruptcy and postpone flights is detrimental to the airline industry because it will reduce capacity and possibly increase prices on some routes, according to the Travel Agents Association of India (TAAI) on May 3.
Go First has halted flights for three days starting on May 3 due to a severe financial crunch brought on by the forced grounding of more than half of its fleet due to P&W engine supply issues.
Besides, the Wadia group-owned airline has filed for voluntary insolvency resolution proceedings under the Insolvency and Bankruptcy Code (IBC).
“It is bad for the (airlines) industry... It is such a fragile industry... we lost crores of rupees in Kingfisher Airlines, in Jet Airways and we have another one going into insolvency (proceedings),” TAAI President Jyoti Mayal said
The developments at Go First, which has been flying for more than 17 years, also come at a time when domestic air traffic is on an upward trajectory.
Ms Mayal said that right now there is demand for air travel as it is holiday time and “we do expect fares going up in sectors it (Go First) was flying. In the coming weeks, fares are likely to go up.”
Regarding booked tickets, she said it is the company that has to provide refunds and if it goes into insolvency, the rules are different.
“Those are the challenges we are going to be facing”.
TAAI has around 2,800 members. In the summer schedule which is from March 26 to October 28, Go First is to operate 1,538 flights per week.
With PTI inputs