Home >companies >news >Delhi runway closure, seasonal demand push up air fares

New Delhi: Seasonal demand and the temporary closure of a runway at the Indira Gandhi International Airport have led to a surge in spot airfare to and from New Delhi.

On Monday morning, spot prices for a non-stop Delhi-Bengaluru flight in full-service carriers were at 35,000-38,000. For one-stop flights, the starting price was over 15,000. Average one-way airfare on the route in February was around 6,500, which inched up to 9,000 in October, an aviation sector analyst said. The runway closure till 23 November is believed to have resulted in cancellation of nearly 100 flights per day.

An official of the GMR group, which operates the Delhi airport, said airlines were given a two-three-month advance notice about the maintenance-related runway closure. “Seasonal demand and jet fuel prices are also reasons for increase in airfare. No airline can complain the runway closure took them by surprise," said the official, seeking anonymity.

Industry observers said a hike in airfare following a runway closure leading to flight cancellations is usually the result of airlines trying to protect their existing customers.

“During events leading to flight cancellations, airlines will prefer to find alternative travel arrangements for existing customers in cancelled flights rather than accepting new passengers at a low fare," said Samyukth Sridharan, president and chief operating officer of Cleartrip.com, an air-ticketing firm.

A senior executive from the airline industry, who spoke on the condition of anonymity, said the surge in pricing is automatic on account of demand, and that it was not the result of an intentional pricing strategy related to any specific event.

“Airlines keep prices low on tickets booked in advance because of intense competition. Because of the low prices on these tickets, airlines are not in a position to make full refund on cancellations. During the season, if there are any disruption in service, fares will be high depending on demand, especially at the last minute," said the executive of a full service carrier, adding that the surge in fare is based on actual demand. “We do not decide to increase the fare if a cyclone is predicted. What if the cyclone doesn’t come?"

In recent years, India has become the worlds fastest-growing major aviation market, witnessing massive increase in capacity and competitive pricing. Policy makers have plans to boost volume of air travel by four-fold to 1 billion trips a year over the next 15 years.

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