Operations cut-down leads to demand-supply mismatch resulting inevitably in fare-hike

As part of the mitigation measures, the Tata group airline announced over the weekend that it was reducing around 10 per cent of its operational capacity — mostly in its domestic network — to provide “much-needed resilience and buffer” in its crew rosters. Given that airfares have been on the higher side for a while now due to a demand-supply mismatch, Vistara’s move has added additional pressure, particularly on the routes impacted by the cancellations.

An executive at another travel agency said that while the Vistara flight cancellations may be a temporary phenomenon that may last a couple of months, even a short-lived disruption adds to the pressure on the capacity-constrained Indian aviation ecosystem that has been struggling to keep up with strong travel demand since the end of the Covid-19 pandemic. In such a scenario, airfares are bound to heat up.

WHILE VISTARA has not specified the duration for which the capacity cut is going to be in effect, it does appear that the restrictions would be in place at least till the end of April. Fares are likely to stay high on affected routes during this period.

It is said that customer is the king; customer is always right; this is how we are taught in Business Management; and one feels one more statement can be added. It is the customer who always pays. Business enterprise can’t help it.

“Looking ahead, we are hopeful of stable operations for the rest of the month and beyond,” Vistara said in a statement on Sunday 7 April.

Any company worth the name at any point of time cannot but be hopeful. And Vistara is right.