Airfares jump on rising demand

Airfares have risen sharply since August, when the government raised fare limits and due to higher demand during the festive season. These limits are applicable for flights made within 30 days of booking. In addition, domestic carriers are currently allowed to sell up to 72.5% of seats on an aircraft.

Strong airlines and airport operators have urged the government to lift the cap on aircraft capacity, which they claim is hindering passenger traffic revival. Weaker airlines, however, oppose the move as they fear that removing the cap will lead to cutting fares by stronger airlines to gain market share.

Now the family of three will have to give so much ₹60,000 for return ticket between New Delhi and Kochi if their journey is within three weeks of booking. Similarly, a family of three would have to pay about ₹45,000 for return tickets between New Delhi and Guwahati, even if tickets were booked three weeks prior to the date of journey. On average, airfares between metros have increased by at least 20-30% in September from a year ago.

Last month, the government increased the minimum and maximum fares for flights of less than 40 minutes ₹2,900 more ₹to 8,800 ₹2,600 more ₹7,800 respectively.

Longest sector fare hiked for flights between 180-210 minutes ₹9,800 more ₹to 27,200 ₹8,700 more ₹24,200, respectively.

Data from online travel portal Ixigo shows that the average one-way fare between New Delhi and Mumbai was 30% higher ₹5,291, for travel between September 1 and September 12, as compared to the previous year. Similarly, the average one-way fare between Bengaluru and Delhi increased by 23%. ₹6,318 while it was 34% higher between Bengaluru-Kolkata for travel in the same period.

Manan Bajoria, Vice President, Growth Marketing & Analytics at Ixigo, said, “The increase in airfares can be attributed to the recent cap increase and rising demand for festive travel in September and October.

“The average MoM (month-on-month) in bookings for some of the popular routes (on the Ixigo apps and website) for festive travel in the coming months has increased by 45% for trains, 71% for buses and 20 for flights. % growth has been observed,” Bajoria said.

As of Monday, domestic air passenger traffic was at 60% of pre-Covid levels, while flight numbers stood at 67.1% of pre-Covid levels, according to aviation analysis website NetworkThoughts.

A senior official of an airline said on the condition of anonymity that the fare caps imposed by the government are probably holding back growth as the overall air travel market in India is a price-sensitive market.

“If the fare cap is removed, the sector will soon return to pre-Covid levels,” the official said.

However, Civil Aviation Minister Jyotiraditya Scindia had indicated in a press conference earlier in September that the cap on fares and flight capacity would remain, though they would be assessed from time to time.