With the country entering the busiest air travel period of the year, airlines have turned to sharply raising their fares to exploit a traditional surge in demand, troubling those who make last-minute travel plans.
According to data from online travel websites, a return trip between Delhi and Kolkata for travel between 3-9 October costs at least ₹10,500, if booked a month in advance on 4 September.
Similarly, a passenger will have to shell out about ₹12,500 for travelling between Mumbai and Kolkata, and at least ₹11,000 for a return journey between Bengaluru and Kolkata, during the same period.
Fares on the Mumbai-Kolkata and Bengaluru-Kolkata routes cost about half if booked for travel during July and August.
Typically, passengers who book tickets 30-45 days before their travel date pay lower prices than those who book up to a fortnight before their travel date. This time around, however, travellers booking even a month before the festive season will have to pay up a significantly higher amount.
West Bengal will celebrate the Durga Puja festival between 3-8 October. Dussehra falls on 8 October, and Diwali on 27 October.
Airlines are trying to make up for the subdued travel demand during the monsoon months when air traffic remained weak, especially this year. Air traffic in India grew 3.1% in the first seven months of 2019—the slowest pace in at least five years—amid market uncertainties in a slowing economy, and the grounding of Jet Airways (India) Ltd.
A gradual reduction in flights of Jet Airways since February 2019 and its eventual shutdown of operations from 18 April has impacted 14% of the industry capacity, according to credit rating firm Icra.
Interestingly, domestic airlines are yet to steeply raise fares on the Delhi-Mumbai route for the festive season. A return trip on the route considered one of India’s busiest—booked on Wednesday—for travel between 8-27 October, costs at least ₹6,000.
Fares on this route are, however, expected to start rising just before Diwali.
“With October packed with Dussehra and Diwali festivities, the fares are on the higher end with travellers taking their festive holiday or returning home to be with friend and families," said Sharat Dhall, chief operating officer (B2C) at online travel portal Yatra.
“However, fares in November have declined as compared to October. But they are expected to increase during the month of December as we anticipate Christmas and New Year’s bonanza to accelerate the passenger load," he said.
Durga Puja creates a huge demand for travel to and from Kolkata, which is the reason behind the rise in ticket price in October, said a senior airline official, who requested anonymity. The official added that the fares between Delhi-Mumbai route is expected to rise after Diwali.
The ability of airlines to raise their fares will be a boost to their financials as it also comes at a time when jet fuel prices have been comparatively benign. Jet fuel prices have risen 8% since 1 January at Delhi airport, the country’s busiest, but are up 9.7% compared with 1 September 2018.
The higher fares may not sustain, with the Indian economy growing at 5% from the year earlier in the June quarter, the slowest pace in six years. An official at an online travel portal said the corporate sector, which comprises the bulk of airline ticket sales, has sharply reduced air travel in the last couple of months.
Leisure travellers, however, are still expected to spend during the festive season, said the official, requesting anonymity. The official added that last minute fares (booked up to 15 days before travel) are expected to remain steep on all routes, including Delhi-Mumbai, during the festive season.
“Most leisure travellers book about 15-30 days before travel. We haven’t seen an increase in Diwali bookings yet. However, this is expected to pick up after 15 September. If not, we will have to accept that the economic slowdown has hit leisure travellers too," the official said, adding that airlines will then have no other option but to sell discounted tickets to fill seats.
Fares may also come under pressure after the festive season with domestic airlines expected to induct 141-156 aircraft in FY20, of which 40-55 will be those owned previously by Jet Airways, according to aviation consultant CAPA India.