Low cost carriers GoAir (now GoFirst) and SpiceJet have agreed to an informal flight combination pact in a first-of-its-kind agreement.
According to HinduBusinessLine, GoAir (recently renamed GoFirst) and SpiceJet have informally agreed to a flight combination agreement. The recently signed agreement will see the two airlines cancel flights with low loads and redirect passengers onto each other’s alternate flights.
With India experiencing its worst wave of COVID-19 cases, demand remains low across the aviation industry. Both the airlines have seen a chance to cut costs dramatically and boost load factors in the short run.
The signing of this kind of agreement means that either SpiceJet or GoFirst can cancel their flight to the same destination due to a low passenger load and move passengers to the other airline’s flight. In turn, the carrier flying the route will charge the other the government-set price for the route. This will ultimately save thousands in fuel costs, crew charges, landing and takeoff fees, and much more.
This agreement seems to have come int effect at the end of April 2021, when India’s second wave of COVID-19 reached its worst point. Both the airlines claim to have cut costs by 70% through this pact and benefitted 20,000 passengers. Additionally, the pact has also reduced both airline’s daily cash burn by nearly 10% (down ₹20 lakhs).
Interline Considerations on Irregular Operations (IROPs)
A SpiceJet spokesperson has confirmed that the airline has an Interline Considerations on Irregular Operations (IROPs) agreement with another Indian airline. This largely confirms the news of SpiceJet-GoFirst agreement that is in effect. However, this isn’t a standard IROPs agreement between airlines.
IROPs are usually created to tackle extenuating or unforeseen circumstances, like weather delays, aircraft issues, or other major disruptions. In such situations, an airline can then rebook its passengers onto another’s flights, ensuring passengers aren’t heavily delayed. However, the SpiceJet-GoFirst IROP is solely to cut costs.
According to some sources, the system is fairly simple. One day before departure, SpiceJet and GoFirst will decide if either will cancel their flight due to low passenger load. If either decides to cancel, the other airline will reduce those seats from its own inventory. The canceling airline also has to pay the flying airline the band price of the ticket, which is currently fixed by the Indian government.
Let me give you an example. SpiceJet had cancelled one of its Mumbai-Ahmedabad flights since only 75 passengers were booked. These passengers then flew on Go First on the same day and did not have to make any changes themselves. Since Mumbai-Ahmedabad is under 250 kilometers, SpiceJet paid GoFirst the government price-fixed rate.
Featured image by CNTraveller
What do you think of GoFirst and SpiceJet’s informal agreement to combine low load flights? Let me know in the comments section below.