Airfares for flights to major cities have spiked up to 80 percent in February because of runway shutdowns and cancellations, hurting demand when passenger traffic growth is already slowing.
Even through the rest of the month, the average airfares will remain up to 67 percent costlier, according to the data provided by online travel search engine ixigo. While the Mumbai-Hyderabad one-way fare has more than doubled to Rs 4,666 (all inclusive) for travel between 10 February and 28 February, flying between Mumbai and Delhi is 35 percent pricier.
The cheapest Mumbai-Delhi flight for 19 February is available for Rs 8,690 as of 4 pm on Monday, 18 February, and for Rs 5,771 for 28 February, according to ixigo. The lowest fare for Mumbai to Bengaluru is Rs 6,596 for 19 February and Rs 2,963 for 28 February.
So far, the steepest average increase was seen on the Ahmedabad-Mumbai route at 80 percent, while ticket prices increased 30-35 percent on an average over the previous year as on 11 February.
Fares on major domestic sectors are at an all-time high, according to Aloke Bajpai, chief executive officer and co-founder of ixigo. Routes such as Delhi-Mumbai and Delhi-Chennai recorded an average increase of 70 percent over a year earlier.
Fares to and from Delhi to cities like Bengaluru, Hyderabad and Pune also saw an average increase of 30 percent.
Flight cancellations are expected to hurt demand for the second straight quarter in the world's fastest-growing aviation market. Passenger traffic growth fell to its lowest in 16 quarters in the three months that ended December 2018 despite the seasonally strong holiday period because of higher fares.
Nearly 230 flights will be cancelled because of the Mumbai airport shutdown between 7 February and 30 March for repairs and maintenance. Both the runways of the country’s second-busiest airport will remain closed between 11 am and 5 pm, every Tuesday, Thursday and Saturday.
One runway of the Kempegowda International Airport in Bengaluru was also not available for civilian traffic between 1:20 pm to 4:30 pm from 14 February to 17 February as preparations for the annual Aero India show began. The airport will also remain shut on 20-21 February on the days of the show, according to the aviation authority. That would lead to cancellation of at least 100 flights, according to The Times of India report.
Moreover, IndiGo is also calling about 30 flights daily till 31 March as the airline faces shortage of pilots.
Besides, airfares may be also rising due to an extended travel season in January and February, Bajpai said. "Airlines have also pulled back on announcing multiple sales, which is generally the norm during this period."
Last Minute Spike
Sharat Dhall, chief operating officer at travel website Yatra.com, said passengers are facing difficulties in getting last-minute seats, especially on Mumbai and Bengaluru sectors because of runway and airport closures. That has led to the maximum increase in last-minute fares, he said.
Booking a ticket up to seven days prior to the flight was 63 percent dearer year-on-year for the Delhi-Mumbai route and about 78 percent costlier for Delhi-Chennai travel, according to ixigo's data.
A Delhi-Chennai flight booked eight to 14 days in advance was also 92 percent costlier in February.
Travel Plans Deferred
The average airfare across sectors, Dhall said, increased up to 10 percent this year after remaining benign for a long time. That put pressure on demand and growth has slowed from 17 to 18 percent to 12-13 percent in the past three months, he said. "Many customers are postponing their travel plans due to sudden increase in air fares."
But for Anand Stanley, chairperson of aviation committee at the industry body FICCI, higher fares are good news. "Competitive prices stimulated strong demand in India, however, pricing that may result in losses is detrimental," he said. "Given the profitability challenges for the industry last year, price corrections are a welcome change for the health of domestic aviation industry."
(This article was originally published on BloombergQuint.)
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