Spot airfares likely to stay high in near term
Go First, which voluntarily filed for insolvency on 2 May, announced temporary suspension of its flights from 3 May. The low-cost carrier left a gap of over 300 daily flights.
PremiumNEW DELHI : Spot airfares continue to trend higher on several routes across India as the domestic civil aviation industry struggles to fill a capacity void caused by the suspension of Go First flights more than a month ago, data from online travel portals showed.
“Air fares are expected to remain higher than those in pre-covid times by over 30-40%," Jay Bhatia, board of directors, Federation of Associations in Indian Tourism and Hospitality (FAITH), said.
Go First, which voluntarily filed for insolvency on 2 May, announced temporary suspension of its flights from 3 May. The low-cost carrier left a gap of over 300 daily flights. Meanwhile, supply chain issues are also hampering capacity deployment by other airlines.
Go First’s maximum deployment in 2022 was seen on Delhi-Mumbai, Srinagar-Delhi, Mumbai-Goa, Patna-Delhi, Delhi-Pune, Mumbai-Ahmedabad, Bengaluru-Mumbai, Delhi-Leh, Delhi-Ahmedabad, and Mumbai-Chandigarh routes.
Data from travel portals showed that last-minute airfares for flights on routes with a strong presence of Go First such as Delhi-Pune have jumped to about ₹16,000 from a little more than ₹5,300 in the last week of April. Spot airfares for flights to Ahmedabad from Delhi have also shot up to ₹14,000 from over ₹3,000 in last week of April, and last-minute fares from Kolkata to Ahmedabad are now hovering at around ₹15,000 from nearly ₹7,700 in April.
Spot fares on the Delhi-Leh route currently cost around ₹7,000 from ₹6,000 in the last week of April. Similarly, Delhi-Srinagar flights are priced at about ₹ 12,000 now, up from nearly ₹9,000 in last week of April. Despite the unusually high air fares, the domestic aviation market continues to experience a surge in passenger numbers. Indian airlines carried around 13.2 million domestic passengers in May, surpassing the previous record of 13.02 million in December 2019. Domestic air traffic in May marked a 15% rise from the year-ago period and more than 2% increase from April. On Thursday, air traffic stood at 429,035 passengers, higher than the daily average of 400,000 passengers in 2019.
“Airfares (especially on spot bookings for popular leisure sectors from Mumbai and Delhi) have witnessed a significant surge vs last month such as Leh 60-80%, Srinagar 50-70%, Goa 40-50% and Pune 25-30%," Indiver Rastogi, president & group head, Global Business Travel, Thomas Cook (India) and SOTC Travel, said.
While the Union government’s recent directive of maintaining a self-check on fares to airlines has led to a respite in fares for destinations like Leh and Srinagar, other routes are expected to witness high air fares for last-minute bookings in near term, experts said.
For now, the surge in domestic airfares for tourism routes is also resulting in international short hauls becoming an attractive option in comparison. Bhatia expects fares to stay firm until August, and pick up again from October onwards during the festival season.
“Air India and IndiGo stepping in with increased capacity has been critical in this super peak travel season—especially for high demand routes like Delhi, Goa, Ahmedabad and Pune," Rastogi added.
This, in addition to the recent government intervention, has further helped in reduction of 10-15% in airfares over the last week such as 10% in Delhi –Leh, 11% in Delhi-Srinagar, 16% in Mumbai-Srinagar and 12% in Delhi-Pune, Rastogi said.
“Many domestic carriers have reduced their flight operations as compared to the winter schedule of last year which is impacting the increase. DGCA should ensure that the airlines operate to their optimum capacity so as to ensure airfares are under control and are affordable prices and not based on short term gains of the airlines," Bhatia added.
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