It?s that time of the year again when travel brochures are pulled out and plans made for the great Indian summer jaunt. But this summer, it may not be all hunky-dory for air travellers. Domestic airfares, already up by over 20%, are expected to rise. Thanks to the massive cancellation of Kingfisher flights, high fuel prices and an anticipated increase in the airport charges.
Though usually airfares witness an increase of about 10% during busy holiday months of April, May and June, this year the hike is projected to be steeper. ?The cancellation of Kingfisher flights has created a vacuum on the supply side. April to June being peak travel months, there is a clear demand-supply mismatch this year,? said Manmeet Ahluwalia, India head of travel portal Expedia.
This means the seat load factor for carriers such as Air India, IndiGo, Jet Airways, SpiceJet, which at the moment is over 80%, could increase further. Since, most of these airlines follow dynamic pricing policy, the lower supply will lead to higher pricing. Kingfisher has cancelled two-third of its flights to 175 with the help of 28 aircraft, down from about 460 flights a day with 64 planes.
?Since, April to June is the peak season, the reduction of flights will lead to lesser availability of seats. The fares will certainly go up and travellers will not have many options but to go for fares these airlines offer,? Vasuki Sundaram, joint secretary of Travel Agents Federation of India, said.
According to industry experts, South Indian destinations are likely to be impacted the most in terms of higher fares. ?Kingfisher?s reported challenges and cutting down of flights will certainly create a conducive environment for domestic airfares to rise, which are already under pressure from the state of airline finances and the unlikelihood of any concessions from the government in terms of taxes on aviation fuel and airport taxes,? said Nikhil Ganju, country manager, TripAdvisor India.
Airlines agree that with spiralling ATF costs and their books in red, they can?t stop fare hikes. The jet fuel prices have gone up by over 18% in the last one year. ?The Airport Economic Regulatory Authority is in the final stages of revising the airport charges. Once that is done, the cost of operation would go up, and the airlines will have to pass it on to the passengers,? a private airline official said.
But there is hope. South East Asian destinations, such as Thailand, Malaysia and Singapore, will become even more attractive as not just international but even domestic low-cost carriers like SpiceJet and IndiGo are now serving these routes offering cheap fares.
Sample this: While a Delhi-Kerala return ticket will cost around R16,000 during summer, you will get a Delhi-Bangkok deal on a full-service carrier for R16,500. Delhi-Kashmir airfare, too, is in the range of R10,000-16,000. ?Though every year there are some comparable offers for the Asian destinations, this year the difference is even more stark. There is a strong growth that we are witnessing in international bookings,? said Sabina Chopra, co-founder, Yatra.com.
