New Delhi: Airfares in India have been rising in the last few months due to tight supply and the situation has worsened with the grounding of Boeing 737 MAX planes, according to a Fitch report. Fitch Ratings also said the impact of the grounding of 737 MAX aircraft on airline operations and airfares in Asia has been largely muted so far, but could worsen from the second quarter of this year due to a seasonal pick-up in travel demand.
Jet Airways grounding planes due to financial woes, SpiceJet suspending operations of its 737 MAX planes and IndiGo curtailing flights during the period from mid-February to March have adversely impacted overall capacity in terms of traffic demand. Against this backdrop, Fitch said it expects growth in Revenue Passenger Kilometres (RPK) to weaken further until supply increases. RPK, a measure of passenger traffic, decelerated to 12.4 per cent in January, it added. The report noted that Jet Airways, which along with its subsidiary Jet Lite had the second-largest share of the domestic market until January 2019, has been steadily losing market share as it has been forced to shrink its operating fleet due to financial troubles.