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As other airplane operators will look to cash in on the opportunity, flight fares are likely to shoot up, adversely affecting travel plans for long-haul destinations. The struggling budget airline has cancelled 1,861 domestic flights for December.
This can potentially trigger a demand-supply mismatch, claim analysts. With scarcity of airplane seats, the market is likely to go into self-correction mode and raise prices.
"The lack of inventory (or air seats) will obviously impact prices. While we've seen about a 10 per cent increase in airfare coming into December, it's quite likely to rise further now, following SpiceJet's cancellations," said Sharat Dhall, president, Yatra, a travel portal.
As a result of increased prices, travel plans are likely to go awry.
Industry estimates suggest reduction of about 25-30 per cent of traffic to long-haul destinations because of the SpiceJet cancellations.
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"Not more than five per cent of the people will be willing to opt for another airline if the rates shoot up. Tourism and hotel bookings will likely suffer that way," said Gour Kanjilal, executive director, Indian Association of Tour Operators.
Till now, large-scale cancellations in hotel bookings have not been observed, according to hospitality expert Achin Khanna, managing director, HVS, a hospitality consultancy service. But in the coming days, cancellation of hotel bookings may rise, analysts said, while hoping for a semblance of price normality is maintained.
However, short-haul destinations could gain from this. "We could see people travelling to places that are closer home if their original plan gets cancelled," said Dhall.
SpiceJet was recently told by the Directorate General of Civil Aviation (DGCA) to curtail its advanced bookings to one month. The financial health of the domestic operator has been a matter of concern for a while now.
The DGCA had also withdrawn 186 of its slots, or 93 flights, a week ago while asking the company to settle arrears on a priority.
