The number of passengers affected even when 1-2% flights get cancelled in a month is staggering. 
| Photo Credit: Kannal Achuthan 10042@Chennai

Since December 2023, hundreds of cancellations and poor on-time performance of airlines have left thousands of people stranded at airports across India. Between March 31 and April 3 this year, 150 Vistara flights were cancelled and 200 flights were delayed by more than two hours. On May 8, Air India Express cancelled 90 of its 360 flights. Similar cancellations, though not at this scale, were recorded across many large airlines at various points this year.

The recent crisis to hit the aviation industry is fuelled by the unavailability of crew. In the case of Air India Express, about 200 cabin crew reported “sick”. In the case of Vistara too, crew unavailability was cited as the reason. There has been a mismatch between demand and supply of crew amid the expansion of the network.

The new troubles have come just as the aviation industry has started shrugging off the effects of the COVID-19 pandemic, which resulted in record losses for all airlines. During the first few months of the pandemic, in 2020, passenger flow came to a halt as airlines were grounded. In later months, passenger flow trickled in as airlines had to follow pandemic-related protocols. Despite that, airlines continued to pay salaries, airport fees, and aircraft and engine rentals and thus faced heavy losses. Later in 2022, when passenger flow returned to pre-COVID-19 levels, aviation fuel prices shot up. Airlines continued to suffer since passing on the fuel price to customers was not an option.

Chart 1 | The chart shows the cancellation rate of various airlines month-wise in the January 2022-March 2024 period. The bigger and darker the box, the higher the cancellation rate. 

Chart appears incomplete? Click to remove AMP mode

In January 2024, 5% of IndiGo’s flights, 3.4% of SpiceJet’s flights, and about 2% of Air India’s flights were cancelled. Even in the month prior, cancellations ranged between 1% and 2% for these airlines.

Chart 2 | The chart shows the number of passengers affected by cancellations. 

While the cancellation rate may statistically appear insignificant, the absolute number of passengers affected even when 1-2% flights get cancelled in a month is staggering. For instance, in the four months between December 2023 and March 2024, 1.5 lakh passengers couldn’t travel due to cancellations. When an airline with a significantly higher number of scheduled flights cancels even 1% of its flights, the number of passengers affected too is considerably higher. which explains the bigger boxes for IndiGo. In total, since January 2022, 6.5 lakh passengers have been affected by cancellations.

Chart 3 | The chart shows complaints about refunds as a share of total complaints received by airlines month-wise in the January 2022-March 2024 period.

Cancellations result in a demand for refunds by passengers. Data show that the refund process has not been smooth. In 2022, across many months, over 25% of the total complaints were about refunds. In 2023 and 2024, this share reduced to 15%, which is commendable given the high number of cancellations. But problems persist.

Chart 4 | The chart shows the on-time performance of airlines, based on data from the Bengaluru, Delhi, Hyderabad, and Mumbai airports. The figure in the chart corresponds to the % of on-time (with some margin) landings and take-offs. 

The on-time performance of airlines has also been drastically falling in the past two years. In December 2023, the on-time performance of all major airlines fell to the lowest level in two years (SpiceJet: 30%, Air India: 47.6%, IndiGo: 60%). The poor on-time performance continued in 2024 as well. In the last two years, 45 lakh passengers have been impacted by this issue.

Also read | The controversy over Boeing’s bestselling 737 MAX and its impact in India | Data 

Representational file image.
| Photo Credit: AP

The global airline industry is facing a summer squeeze, with travel demand expected to surpass pre-pandemic levels while aircraft deliveries drop sharply due to production problems at Boeing and Airbus.

Air carriers are spending billions on repairs to keep flying older, less fuel-efficient jets, and paying a premium to secure aircraft from lessors. But some carriers are still being forced to trim their schedules to cope with the lack of available planes. At the same time, the number of travelers globally is set to hit historic levels, with 4.7 billion people expected to travel in 2024 compared with 4.5 billion in 2019.

“We can expect a strong performance from airlines throughout the summer with some particularly high airfare,” said John Grant, senior analyst at travel data firm OAG.

Last December, the International Air Transport Association (IATA) had predicted a 9% annual growth in global airline capacity this year. That estimate looks optimistic following Boeing’s safety crisis.

Passenger carriers will receive 19% fewer aircraft this year than they expected because of production issues at Boeing and Airbus, said Martha Neubauer, senior associate at AeroDynamic Advisory.

U.S. carriers will receive 32% fewer aircraft than planned a year ago because several airlines depend on Boeing’s 737 MAX planes, Neubauer said. Boeing’s production has been curbed after a January mid-air panel blowout.

Boeing is reeling from a sprawling crisis that erupted after the Jan. 5 Alaska Airlines blowout. Regulators have put a cap on production of the 737 MAX, but the company is not hitting even that level.

As many as 650 Airbus A320neo jets could be grounded in the first half of 2024 for inspections to deal with a flaw with RTX Corp’s Pratt & Whitney engines, RTX said last year.

In Europe, low-cost airline Ryanair has cut some routes. In the United States, United and Southwest have cut back flying and adjusted hiring and staffing plans.

Leasing market booms

Analysts expect capacity at most U.S. carriers in the second quarter to grow at a slower pace than a year ago. Airlines will update their growth plans and explain how they will offset capacity constraints when they report quarterly results, starting on Wednesday with Delta Air Lines.

Due to the shortage of new planes, the aircraft leasing market is booming. Data from Cirium Ascend Consultancy shows that lease rates for new Airbus A320-200neo and Boeing 737-8 MAX aircraft have hit $400,000 per month, the highest since mid-2008.

Airlines are spending 30% more on aircraft leases than before the pandemic, said John Heimlich, chief economist at Airlines for America (A4A) that represents major U.S. carriers.

They are also holding on to jets that are past their useful economic lives and require heavy maintenance that now takes several months, Heimlich said. Repair costs at United, Delta and American were up 40% last year from 2019.

Increased leasing, repair and labor costs will bite in to profit despite the high demand, Heimlich said. U.S. passenger airlines posted a pretax margin of 4.5% last year, with the bulk of contribution coming from Delta and United.

Fewer Americans are planning to travel on a plane this summer compared with a year ago due to high inflation, a survey by travel website the Vacationer showed. Airline fares are down year-on-year, but have been rising month-on-month.

A Vistara Airbus A320 passenger aircraft. File.
| Photo Credit: Reuters

Vistara has cancelled nearly 1,000 flights for the month of April in order to ensure stability in its operations, which saw a massive disruption last week over hectic rosters for pilots and unrest from a section of cockpit crew over pay cuts.

“We are carefully scaling back our operations by around 25-30 flights per day, that is, roughly 10% of the capacity we were operating,” a Vistara spokesperson said in a statement.

Also read | Merger pangs: Vistara gives ultimatum to pilots over new pay

The move will provide a much needed buffer to the airline in pilot rosters.

The airline said that the cancellations will mostly affect domestic flights and have been implemented much ahead of time to minimise inconvenience to passengers.

“All the affected passengers have already been re-accommodated on other flights,” the airline added.

Vistara has also deployed bigger Airbus A321 and Boeing 787 aircraft on domestic routes to accommodate more number of passengers and has also been booking its customers on other airlines. Air India will also be sending nearly 20 First Officers on deputation to support Vistara. Six Airbus A320s of Vistara are also being shifted to Air India Express to improve the aircraft and manpower ratio.

The cancellations are expected to push up airfares during the peak summer travel season in a market that is already grappling with nearly 200 aircraft grounded due to engine issues, out of which IndiGo alone has over 70 non-operational planes.

Vistara, co-owned by Tata Group and Singapore Airlines, has been hit with a number of flight delays and cancellations over the last few days, the airline said on Monday.

The airline said its teams are working to stabilise the situation.

“We confirm that we have had a number of flight cancellations and unavoidable delays in the last few days due to various operational reasons,” said the Vistara spokesperson.  

“Our teams are tirelessly working to stabilizing the situation. We regret the inconvenience caused to our valued customers due to these disruptions,” the spokesperson added.

The irate passengers took to internet to complain about the long delays.

“#Vistara #UK827 Bombay to Chennai delayed more than 5 hours and no confirmation yet. Absolutely pathetic,” Vignesh Murali posted on X.

#Vistara#UK827 Bombay to Chennai delayed more than 5 hours and no confirmation yet. Absolutely pathetic. pic.twitter.com/vbsf7X98YJ

— Vignesh Murali (@Vigneshmurali95) March 31, 2024

“I’m seeing many such complaints about Air Vistara in the last two days… Wonder what’s wrong. Some said pilot/crew shortage,” posted Swaying Sayings on X.

“Yes, too many complaints. Can @vistara be more honest and tell its customers what is wrong, how long, cut flights with notice, and restore credibility? Too much of lies now. People trust vistaara, getting damaged, @JM_Scindia,” posted TV Mohandas Pai, Chairman, Aarin Capital Partners.

Yes, too many complaints. Can @vistara be more honest and tell its customers what is wrong, how long, cut flights with notice, and restore credibility? Too much of lies now. People trust vistaar, getting damaged, @JM_Scindiahttps://t.co/ofxPIsjGkS

— Mohandas Pai (@TVMohandasPai) April 1, 2024

“Another Vistara flight delayed by an hour!. They have really adopted the Air India culture well,” said Anshu Mor, a stand-up comic.

Another Vistara flight delayed by an hour! . They have really adopted the Air India culture well.

— Anshu Mor (@anshuMor) March 30, 2024

Historian and writer Vikram Sampath posted his flight was cancelled last minute.

“Pathetic @airvistara … mumbai blore flight 5 pm gets cancelled last min citing “operational reasons”.. we change booking to morning 9 am. U announce boarding n then say “operational reason” it now leaves at 11. Do u even care for ur customers, their time, money? As a CV Gold member frustrated by ur poor service,” posted Mr Sampath.

Pathetic @airvistara … mumbai blore flight 5 pm gets cancelled last min citing “operational reasons”.. we change booking to morning 9 am. U announce boarding n then say “operational reason” it now leaves at 11. Do u even care for ur customers, their time, money? As a CV Gold…

— Dr. Vikram Sampath, FRHistS (@vikramsampath) April 1, 2024

Early in March, the flight operations of Vistara were impacted at Delhi and Mumbai airports, mainly due to the non-availability of pilots.

Vistara is in the process of merging with Air India post its privatisation and Singapore Airlines acquiring a 25.1 per cent stake in the once state-controlled airline.