The airlines claim that IndiGo has been launching flights at time slots similar to that of other airlines, lowering their yields and forcing them to discontinue or reduce flights on those routes
Rival airlines have accused IndiGo alleging that it is using its fleet size and financial might to squeeze them out of the market, The Economic Times reported.
The airlines claim that the low-cost carrier has been launching flights at time slots similar to that of other airlines, lowering their yields and forcing them to discontinue or reduce flights on those routes, the report said.
The remark comes when India’s airline industry is struggling because of rising fuel prices and a weak rupee.
Last week, Tripura Chief Minister Biplab Kumar Deb wrote to the Aviation Ministry, urging it to intervene into a similar situation on the Agartala-Kolkata route where IndiGo allegedly forced SpiceJet to stop flights.
"The withdrawal of flights by SpiceJet created a monopolistic situation for IndiGo Airlines, resulting in a sharp increase in airfares," Deb told Aviation Minister Suresh Prabhu, in his letter reviewed by the paper.
Deb added that the airfare from Agartala to Kolkata has already shot up from Rs 2,000 to Rs 5,000.
"We get an impression that IndiGo Airlines is now trying to exploit this situation by withdrawing more flights, which will result in a further increase in airfares to their benefit. This, in our view, certainly calls for intervention from the ministry of civil aviation."
IndiGo has denied the accusations, saying that increasing capacity is part of its strategy to remain competitive. It further said that it would continue to add flights to Agartala as and when demand increases. Currently, IndiGo said that it has 10 daily departures out of Agartala.
"We have selectively increased frequencies across our existing network and now offer connectivity to over 1,300 city pairs via non-stop and one-stop flights. We believe that the depth of our network, increased capacity and a high number of flights provides us with a competitive edge through economies of scale, allowing us to optimize our costs," IndiGo said.
Agartala-Kolkata is not the only route that SpiceJet has pulled out its services. The airline has discontinued flights on 11 other routes and shut three stations, including Agartala. It has been facing competition from IndiGo on 36 routes, including six international ones, according to data accessed by the paper.The data also show that Jet Airways, Vistara, and GoAir appear to have been hit by IndiGo flight launches. Jet had to discontinue about 23 flights on 14 routes across India due to pressure on fares after IndiGo added 19 flights on these routes, taking its flight tally to 30 on this route. The airline had to reduce frequency on about seven more routes due to pricing pressure following flight launches by IndiGo, the report said.
Similarly, Vistara is also struggling with flights on six routes. IndiGo is reportedly launching services on three of six routes announced by the former.
Rivals claim that such behaviour erodes the industry’s ability to raise fares to meet the rising cost of operations on the back of surging fuel prices and a depreciating rupee.
"Capacity addition beyond natural demand will always bring down the fares, which will have a negative impact on the industry, especially in the current cost environment," Vistara told the paper.
GoAir said that aviation is an extremely price-sensitive market and such practices will only spell disaster to the aviation value chain. "In the long term, this will have a ripple effect on jobs, tourism, and economic growth," the airline said.
