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Airfares likely to rise 20% next month

Air ticket prices are expected to rise upto 20% as the peak travel season kicks off from this week
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First Published: Wed, Oct 17 2012. 05 54 PM IST
Air India and Jet Airways have cut flights in the domestic market but SpiceJet, GoAir and IndiGo have increased them. Photo: Ramesh Pathania/Mint
Air India and Jet Airways have cut flights in the domestic market but SpiceJet, GoAir and IndiGo have increased them. Photo: Ramesh Pathania/Mint
Updated: Thu, Oct 18 2012. 01 34 PM IST
New Delhi: Airfares in India are likely to rise in the winter season as airlines have reduced domestic flights capacity by 19% from a year earlier.
The reduction is in part because of Kingfisher Airlines Ltd closing operations earlier this month and a decline in the number of flights by Jet Airways Ltd and Air India Ltd.
“There is a reduction of flights in winter schedule 2012 vis-a-vis winter schedule 2011 by about 19%,” aviation regulator Directorate General of Civil Aviation (DGCA) said in a statement on Wednesday.
SpiceJet, GoAir and IndiGo are increasing flights in the winter season but that will still not fill the gap created by Kingfisher’s exit till end of the year, said an airline official, who declined to be named.
Kingfisher’s flight schedule for winter has not been approved by the regulator. The airline had 2,930 weekly flights last winter season that ends in March.
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The peak travel season starts this week and goes up till 10 January.
“The Diwali week is going to be tight and Christmas to New Years will be ultra tight,” said Sunny Sodhi, vice-president, air product, at online travel firm Yatra Online Pvt. Ltd, referring to high airfares.
Sodhi expects fares to be up 15-20% on an average. “The last few months, demand was pretty bad so I don’t see an obnoxious rise.”
A family of four travelling from Delhi to Mumbai on economy class tickets would need to pay Rs.68,000 for a return flight if they book tickets for travel within a week and about Rs.38,000 if the tickets are booked a month in advance. The same would have cost Rs.40,000 and Rs.28,000, respectively, in 2010.
These will be higher for the four days before and after Diwali, and the last week of the year that includes Christmas.
Jet will reduce flights by 10.9%, Air India 6.2% while SpiceJet will increase flights by 8.87%, GoAir by 14.8% and IndiGo by 30%, DGCA said.
Newly launched Air Mantra will add 42 weekly flights to the country’s scheduled airline network.
The impact of Kingfisher’s absence will also be seen on airports.
DGCA said only 73 airports are now connected by flights compared with last year’s 82.
The airline market has been slipping into negative growth zone for three consecutive months ending August.
DGCA is expected to announce September passenger numbers on Thursday.
The airline official cited above said he expects a 8-10% drop in passenger traffic for September.
“But from November it is going to see a positive jump of 5%,” he said.
Despite high airfares and the market shrinking this fiscal, flight occupancy has not fallen drastically to 50%. It remains 60-70% even in the worst month of September, the official said.
Rival airlines are also benefiting from Kingfisher closure. Air India, for example, Yatra’s Sodhi said, is picking up market share and passengers.
He said if his company was selling 10 Air India tickets daily in August out of 100, the number has now risen to 16-17 everyday. But, he added, airlines will need to have fares “at the sustainable level where the demand does not get impacted further”.
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First Published: Wed, Oct 17 2012. 05 54 PM IST
More Topics: Airfare | Air India | Jet Airways | SpiceJet | GoAir |
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