After a brief respite, air travellers may have to shell out more from December 15 as domestic air carriers are planning to increase fares on the back of strong demand. The period between the last fortnight of December and the first week of January usually sees more people flying.
?Traditionally demand is very high during this period resulting into an increase in fare,? SpiceJet chief commercial officer Samyukta Sridharan said. When asked if the fare would go up this time also, Sridharan said it will depend on demand. The spot air fare across the domestic network especially metro routes had sky-rocketed between November 5-15 with Diwali falling in the first week of the month, high foreign tourist inflow and the marriage season. Delhi airport saw a 18.5% increase in foreign tourist arrival in November compared to 5.1% in the previous month. The price of a return air ticket on some of the metro routes had jumped to as high as Rs 35,000. This resulted in the aviation sector regulator Directorate General of Civil Aviation (DGCA) stepping in.
The regulator asked the carriers to ensure transparency and fairness while setting tariffs. The government has claimed that fares have come down 20-25% in the last few weeks due to DGCA’s intervention. ?After November 15, demand started tapering and hence the fares fell. Demand is expected to build up starting December 15 and fares may go up again,? executive of another private airline said. Centre for Asia Pacific Aviation (CAPA) India head Kapil Kaul said there was supply-side constraint and so fare would go up when demand increases substantially. ?In a deregulated environment, market forces are the best protector of consumer interest. History has proved it,? Kaul said. Most of the countries have deregulated the airline sector for ticket pricing. The UK completely deregulated the airfare in 2006 with only rider that it would intervene only if there was a case for that. ?The UK deregulated the airline tariff but it simultaneously strengthened the competition rules,? said an industry watcher. Airlines in India are also free to decide air fares factoring in their operating cost, profit and demand-supply dynamics.