Domestic air fares have soared up to 44%

Online travel operator Cleartrip has seen around a 6% increase in airfares for the current quarter from September. For the 21-31 December period, rival Ixigo has witnessed a 44% rise in airfares for the Bengaluru-Kolkata route, a 40% rise in the New Delhi-Goa route and a 15% rise in the New Delhi-Bengaluru route.

On the other hand, spot fares for a Delhi-Mumbai flight have jumped to ₹15,000-20,000 from ₹5,500 in September and ₹9,000 in May. Spot fares on a Mumbai-Bengaluru flight are around ₹4,000-17,000 from about ₹2,000 in September. Spot fares on the Delhi-Bengaluru route have skyrocketed to around ₹15,000-35,000 from nearly ₹7,000 in September and ₹10,000 in May.

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Airfares in October-December are higher as Indians plan their winter and New Year break, a Cleartrip spokesperson said.

The spike in fares is due to high demand as post-covid consumers are planning their vacations without much worry or fear. Even international destinations have lifted most of the covid-related restrictions, the spokesperson added.

The Indian aviation industry is also facing a serious challenge in the form of the grounding of over 75 aircraft, or around 10-12% of the fleet, because of maintenance or engine-related issues, according to CAPA India. The second half of FY23 may be challenging for Indian airlines as there will be an impact due to supply chain issues as aircraft are grounded due to a lack of engines and a significant slowdown in new deliveries, which is impacting all airlines. This also includes more than 35 aircraft, or 12% fleet of IndiGo, India’s largest airline, and over 25 planes or 47% fleet of GoFIRST.

This is also visible in the winter schedule for airlines, which commenced on 30 October. According to the winter schedule published by the Directorate General of Civil Aviation (DGCA), Wadia Group-promoted GoFirst has been approved to operate 1,390 flight departures per week, a 40% decline from its winter schedule of 2021 and IndiGo has been approved to operate 10,085 flight departures per week, 1.5% less than winter schedule of 2021.

GoFirst recently suspended Delhi-Male flights until 4 December. There are also complaints from passengers regarding its operations and last-minute chaos regarding flight timings, among other issues, a travel agent said.

“Smaller airlines have not added capacity as fast as they were doing pre-covid. Because of this, there are choke points on some routes. Recently we saw amid the Diwali rush that Mumbai-Delhi route was sold out. This kind of demand is expected around festivals, and if there was more capacity addition, we would have sustained fares that were lower and fulfilled greater demand,” Aloke Bajpai, co-founder and group CEO, ixigo, said. Ixigo has seen average airfares rise 20-30% this year on popular metro routes due to rising oil prices.

Apart from geopolitical tensions pushing up airfares, capacity deployment is a key issue impacting the industry right now, Bajpai said.

The discontinuation of fare caps, effective 31 August, had led to a 30% drop in airfares across routes in September, offering some relief to travellers who had to pay up eye-watering fares over the past few months as airlines passed on soaring fuel prices to customers. While fares may not skyrocket as compared to September levels, they are set to be higher in the current quarter as the demand is expected to surge until December, an aviation analyst said.

“As we approach the travel season, airfares that fall within the 15 days of travel from the booking period, we expect the fares to be high, but travel bookings in advance would tend to offer better rates,” said Bharatt Malik, senior vice president, flights, Yatra.com.

A few months ago, rising demand, lower capacity, and the disrupted financial condition of the airlines, along with high fuel prices and inflation were the major reasons for expensive flights, said Rikant Pittie, Co-founder, EaseMyTrip.

With the government removing the fare band, airfares will rely on demand-supply situations. Having said this, high jet fuel prices and the weak rupee continue to have a significant impact on the pricing of air travel, and this is certainly a subjective matter, Pittie said.

Airfares for travel during the last week of December this year are higher by 25-30% on some routes in the year earlier, according to Ixigo.

While travel sentiment is at its peak with the expectation of robust demand during the winter holidays, any restriction on the capacity front could mean a spike in airfares and sold-out routes, the analyst said. Fares generally tend to soften from January due to a dip in demand, but this time may be different with the supply chain issues in place, he added.

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