Airfares may remain high in April-May as planes stay grounded3 min read . Updated: 19 Mar 2018, 08:38 AM IST
Airfares to remain at least 5% higher during the summer schedule, and affected airlines to raise their capacity to address demand, says Yatra's COO (business to consumer) Sharat Dhall
Mumbai: Airfares which jumped after low-fare airlines IndiGo and GoAir grounded a total of 14 flights since February due to engine problems have since come down, but are expected to remain high in the holiday months of April and May.
According to data from travel website Yatra.com, price of New Delhi-Mumbai economy class tickets surged to Rs15,797-Rs29,644 (for the cheapest and most expensive tickets) on 13 March for the same day, while that for Delhi-Kolkata was Rs6,117 - Rs18,825.
Regular non-peak season economy fares are Rs5,000-8,000 for Delhi-Mumbai and Rs6,000-Rs8,000 for Delhi-Kolkata.
Delhi-Mumbai ticket is expected to cost Rs4,807-Rs17,797 for flights on 19 March while that of Delhi-Kolkata is expected to be Rs5,857-Rs 25,561, according to Yatra.com data.
“There was a huge surge (in airfares) during one or two days (March 13-14) as there were huge amounts of (flight) cancellation. Very few seats were available for customers to rebook since the load factors were high. But the ticket prices have come down to near normal (levels)," Yatra’s chief operating officer (business to consumer) Sharat Dhall said.
Dhall expects airfares to remain at least 5% higher during the summer schedule, and affected airlines to raise their capacity to address demand.
“If capacity is out of the market for a long period of time, there is going to be upward pressure on prices, especially as summer travelling season kicks in by March-end. If capacity is not there, it will have impact with higher prices," Dhall says.
On 12 March, 11 Airbus A320neo (new engine option) aircraft belonging to IndiGo and GoAir, powered by Pratt & Whitney (P&W) engines, were grounded due to engine glitches. As many as 66 flights operated by both airlines were cancelled that day, wiping out 2-3% of industry capacity, and pushing up fares in the next two days.
The Directorate General of Civil Aviation (DGCA) had earlier grounded three aircraft powered by P&W engines, belonging to IndiGo in February.
“Airfares of affected airlines, especially IndiGo, remain on the higher side on key metro-routes for bookings up to May (as compared to the previous year)," a Mumbai-based travel agent said on condition of anonymity.
“People will not change their travel plans due to airfare hikes on domestic routes unless they get a far cheaper offer for an international destination," the travel agent said adding demand for air tickets on popular metro routes and tourist destinations remain high.
A GoAir spokesperson said the airline, which has made changes in its existing network, will accommodate passengers in its other flights. The spokesperson added that the airline doesn’t comment on its ticket pricing.
IndiGo said in a statement on 16 March that it has cancelled less than 4% of its flights, and is accommodating all affected passengers in other flights.
“We are also actively engaged with our engine and aircraft manufacturers to find a long term solution (A320 Neo engine glitches) at the earliest," the airline said. An IndiGo spokesperson added that the airline doesn’t comment on ticket pricing.
Analysts tracking the sector expect supply of seats to remain weak for a couple of months due to the grounding of aircraft.
“Even if they (IndiGo) want to go for short term lease, it will take some time before this materialises," Rampuria said adding that he expects supply to remain weak for at least couple of months.
Meanwhile, other airlines like Jet Airways have already planned to increased their flights for the summer schedule. The Naresh Goyal-led airline on 14 March said it will introduce an additional 144 weekly flights as part of its summer schedule, starting March-end.
“As part of the new schedule, Jet Airways will strengthen connectivity between the country’s capital and the northeastern region," Jet Airways said in the statement.