Air ticket prices likely to rise as GoFirst cancellations reduce capacity
2 min read . Updated: 03 May 2023, 01:52 PM IST
PremiumGoFirst has canceled flights for three days starting May 3, bogged down by an acute financial crunch due to the grounding of more than half of its fleet amid P and W engine supply woes.
Travel agents' grouping TAAI on Wednesday no-frills carrier GoFirst for insolvency proceedings and canceling flights is bad for the airline industry as the move will reduce capacity and could push airfares in certain routes.
GoFirst has canceled flights for three days starting May 3, bogged down by an acute financial crunch due to the grounding of more than half of its fleet amid P&W engine supply woes.
Besides, the Wadia group-owned airline has filed for voluntary insolvency resolution proceedings under the Insolvency and Bankruptcy Code (IBC).
Speaking to the news agency PTI, Travel Agents Association of India (TAAI) President Jyoti Mayal said, “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)."
The developments at GoFirst, which has been flying for more than 17 years, also come at a time when domestic air traffic is on an upward trajectory.
“Right now, there is demand for air travel as it is holiday time and we do expect fares going up in sectors it (GoFirst) was flying. In the coming weeks, fares are likely to go up," the TAAI President said.
She further stated 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," she said regarding booked tickets.
In an official statement, TAAI expressed concern over the sudden cancellation of flights by Go First, PTI reported.
"The cancellations and refunds of tickets to its members and consumers have raised concerns at TAAI, who fear that travel agents will be adversely affected, presenting a significant financial blow as they struggle to revive post-Covid," it said.
"The association has been advocating for protection through insurance on tickets or placing monies in an escrow account with the government as protection for the entire ecosystem," it said, adding that the government needs to bring policies to safeguard consumers and service providers money.
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)