NEW DELHI: Domestic fliers are now deserting planes and settling for other modes of transport. On Friday, the aviation ministry released figures that showed the number of fliers in the school holiday season of June was 35.06 lakh — a good 6 lakh less than the number in May — showing a 15% fall in one month.

The Indian aviation growth story is in air pocket due to oil crisis. Wadia group-owned GoAir, which has cancelled the largest number of flights, led the fall with 33%. The Kingfisher-Deccan combine flew nearly 19% less passengers and Jet-Jetlite suffered an erosion of 14%. All airlines have reduced flights to cut losses. GoAir which once claimed to have 561 weekly flights reduced the number to 800 per month in June and is may reduce it by another 300.

While airlines expected a fall in numbers from July to September, the lean season, the early fall in June has come as a shock. "The situation has become so grim that just cutting flights won't help as even if they are on ground, the fixes cost has to be borne. Now whatever was considered as fixed costs — lease rentals and employee, especially pilots' salary — will have to be treated as variable costs," said COO of an airline.

Now many airlines will start renegotiating lease terms and may ask pilots to have a take home salary depending on the number of hours they fly. For instance, a Boeing 737-700 has a lease rental of $ 300,000 and airlines took them on the assumption of using a plane for 10 hours 30 days a month. So the lease rental comes to $10,000 an hour.

If oil prices continue to rise and airlines are forced to cancel flights, then they could ask lessors to accept a fee on the number of hours the plane flies for. "The lessor will be told that at these rates, we will go bankrupt and he gets nothing. So, getting paid for number of hours we fly is the only way to survive for airlines that have leased planes," said another CEO of another airline. Similarly pilot salaries account for over 60% of airlines' total wage bill.

"A pilot gets about Rs 6 lakh for flying a maximum of 75 hours a month. But now with flights cancelled, we can't utilise his 75 hours a month. US carriers are already laying off pilots and they realise the situation is very tough. So we may have to ask them to accept their salary on the basis on number of hours they fly," said the CEO.