The summer season in India has a lot trickling down people’s backs. If the heatwave wasn’t enough, the sweltering airfares have been burning a hole in the pockets of people with each ticket they book.
Stir in the aviation industry
The post-pandemic summer season has seen people booking tickets for destinations far and wide. However, the unwelcoming fares following a surge in demand, GoFirst bankruptcy, grounding of aircraft, flight cancellations and reduced airline capacity has had people paying with their teeth gritted.
The aviation industry has been on a rollercoaster ride of its own. Taking note of the sky-rocketing fares, former Finance Minister P Chidambaram highlighted the issue. He cited the rates of an Air India and a Vistara flight on the same day for the same route. While the Air India flight’s fare was Rs 28,000, Vistara’s price stood at Rs 12,000. “The issue is not who travels in what class. The issue is, why are fares rising practically every week?” he asked.
Surging demand and falling aircraft on routes
Earlier this year, India’s domestic air traffic saw a new record being set on April 30, as 456,082 passengers took to the skies in a single day. In January to May, passengers carried by domestic airlines stood at 636.07 lakhs, registering an annual growth of 36.10% and monthly growth of 15.24%, as per the DGCA.
While demand continued to surge, the aviation sector braced for certain setbacks. The industry was already witnessing flights being grounded due to several factors. In the midst of all this, GoFirst in May announced it was filing for insolvency. What followed was flights being cancelled, flyers waiting for refunds, and routes with fewer wings. All this while, IndiGo and SpiceJet’s grounded airplanes were often hitting the headlines.
A quick glance at the DGCA’s report gives one an idea of the aftermath. In April, GoFirst held a domestic market share of 6.4%, which fell sharply to 0.4% in May. SpiceJet too saw a continuous decline in its share from January to May.
As we write this, GoFirst has cancelled its flights up until June 25. The absence of GoFirst and SpiceJet flights on many routes worked well for players like Air India and IndiGo. Unnatural surges have been seen on routes where GoFirst had planted itself firmly.
Routes facing the heat
A report by The Indian Express said cited industry insiders said routes connecting major cities with places like Leh, Srinagar, and Pune and some popular destinations are some of the worst hit routes by the price surge. Earlier this month, the airlines were asked to come up with a mechanism to have reasonable fares, especially on routes GoFirst served. The civil aviation ministry said this would be monitored by the DGCA.
Jet fuel prices hit new record
Last but not the least, the jet fuel prices have been adding to the turbulence in a major way. This month the jet fuel prices were hiked to 16%, carrying the rates at an all-time high. This rise will increase the operational costs of the airlines, which in turn keep the airfares swimming high up.
What remains to be seen is how will the government and the airlines work in tandem to ease the pressure on the flyers’ pockets.