Cap on flights shields SpiceJet, GoAir; delays recovery

Two days ago, the civil aviation ministry issued a fresh order that allowed domestic airlines to fly at 60 per cent capacity of their approved summer schedule. This was the second time the ministry had revised its diktat of capping capacities for carriers. In May when the domestic fights were started after a two-month hiatus, the cap was 33 per cent which was later revised to 45 per cent in June.

Experts say that the idea of having a capacity cap doesn’t make sense unless the government wants to protect the smaller players like SpiceJet and GoAir who have been badly affected by the pandemic. As per Centrum Broking, low-cost carrier SpiceJet is expected to post net loss of Rs 2,284 crore in FY21 due to disruption in operations.

“The cap on capacity in anti-competitive, and highlights the government’s intention of protecting some airlines,” says an aviation analyst.

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