With Covid no more acting as a hindrance to travel and removal of fare caps by the government, airlines are set to see their cash registers ringing this festival period followed by Christmas and New Year’s holidays.
Airfares on most popular routes have not only crossed the pre-Covid-19 levels, but are at multi-year highs as consumers take to revenge travel after facing a host of restrictions in the last two years.
Online travel aggregators FE spoke to said for the Diwali period, fares are 30-40% higher than the year-ago period. Compared to Diwali 2019, fares are up nearly 2-3 times.
A one-way, non-stop Mumbai-Kolkata flight, which cost Rs 3,558 in 2019 during Diwali, is priced at Rs10,878 this year. Similarly, a Delhi-Mumbai non-stop flight, which costRs 3,206, is priced at nearly Rs 6,000 this year. Other popular routes like Kolkata-Delhi and Delhi-Bengaluru are witnessing a similar jump.
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Domestic airlines saw a 67% increase in the number of domestic flyers to 77 million during January-August compared to the year-ago period, according to the DGCA data.
Indiver Rastogi, president & group head – global business travel – Thomas Cook (India) & SOTC, said, “There is a surge in positive consumer sentiment which is driving demand for the festive season and beyond by 30-35% against the previous quarter. Airfares from Mumbai, Pune, Delhi and Bengaluru have increased by 60-70% for Andaman, Himachal and Kashmir; 50% for Goa and 75-80% for Kerala.”
With new cases of Covid-19 remaining under check, high number of double vaccinations throughout the country, high propensity of spending and the urge to take a break have led to the surge in travel.
Nishant Pitti, CEO & co-founder, EaseMyTrip, said, “We are seeing the golden era for Indian online travel aggregators as travel is in full resumption and the spirit is at its all-time high. We are hopeful to see our bookings increase many folds, this season as well.”
Besides demand, the other important reason behind the surge in airfares is the near doubling of jet fuel in the past 12 months. The current price of a litre of aviation turbine fuel (ATF) in Mumbai is Rs 120 while in September last year it was Rs 64.76.
Airlines are adding fresh capacity to deal with the demand surge, which might bring in some respite in airfares. Vistara, the country’s second-biggest carrier, and newly-launched Akasa Air have committed to increase the number of flights per day.
“Demand for air travel is expected to soar in the upcoming quarter. We will follow a balanced approach and price our fares competitively. There is a consistent increase in demand across our network. Currently, we operate over 250 flights a day and we plan to take it up to 270-280 flights per day in the winter schedule to cater to the growing demand,” said a Vistara spokesperson.
Sanjay Kumar, chief strategy and revenue officer, IndiGo, said, “There is a consistent increase in the number of travellers over the last 5-6 months. Removal of airfare capping will give an opportunity to offer dynamic pricing to our passengers. We continue to see robust growth across the network and our expansion is being accompanied by high growth in connecting traffic.”
