Rise in airfares due to Go First's bankruptcy is temporary says SpiceJet CEO

SpiceJet CEO Ajay Singh on Thursday said there is a need for "more rational airfares" in the country even as he tried to assuage concerns of a hike in airfares as a consequence of competitor Go First filing for voluntary insolvency by terming it a "temporary phenomena". He termed the Go First development as "extremely unfortunate" and expressed hope that the airline can use this opportunity to resolve their issues.

Asked about concerns on hike in airfares as a consequence of competitor Go First filing for voluntary insolvency, the SpiceJet chief said: "Those are temporary phenomena".

"Of course when there is a mismatch of supply and demand, airfares will go up but this settles quite nicely as you would have seen the last time an airline went down there was a temporary period of mismatch and the capacity came into the system and fares were back to normal," Singh said.

He further said that while the era of low airfares has helped in boosting air travel in this country, sometimes it has also led to difficulties for airlines as is evident for all to see.

He observed that more rational airfares are required in the country and hoped that the fares will be more rational in the times to come.

Speaking to reporters on the sidelines of an Assocham event, Singh, who is also the President of the industry body, said it was "Not at all likely" that the aviation sector will be affected by one airline going down.

"You will see that the number as on April 30, we had 4,50,000 people who travelled by air, that was a record number. At no time in the past has India seen such a record number of people travelling by air and you will see the numbers bounce back really really quickly," he said.

Asked how he looks at the development in the aviation sector (of an airline going down), he said: "It is of course extremely unfortunate but hopefully Go First can use this opportunity to resolve their issues and the sector at large can use this opportunity to resolve their issues and emerge even stronger".

On SpiceJet's plan to add 25 aircraft to its fleet, he said: "During Covid, several of our aircraft had gone down and with increase in demand, we want to revive all those aircraft and there are so many small stations that have been left unconnected or less connected as a consequence of the problems that occurred during Covid. We hope to bring back all those flights and increase frequency to several destinations around the world".

Budget carrier SpiceJet on Wednesday said it is working to revive 25 grounded planes and has so far mobilised Rs 400 crore for revival of these aircraft.

The announcement came a day after competitor Go First filed for voluntary insolvency resolution proceedings and decided to cancel flights for three days starting May 3.

In a statement, SpiceJet said funds for the revival of the 25 aircraft will be drawn from the government's Emergency Credit Line Guarantee Scheme (ECLGS) and better cash accruals.

The airline has around 80 planes in its fleet and is looking to revive 25 grounded Boeing 737 and Q400 aircraft.

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