Domestic holiday season air ticket sales may see tepid growth

Updated: October 28, 2019 11:56:09 AM

Online travel aggregators (OTA) have already observed flat growth in volumes of domestic ticket sales during the Diwali period.

Industry experts said domestic sectoral issues have contributed to the tepid volume growth. (rohnit phore)Industry experts said domestic sectoral issues have contributed to the tepid volume growth. (rohnit phore)

By Anwesha Ganguly

Airline ticket sales for domestic travel during the forthcoming holiday season are likely to see tepid growth this year, due to subdued consumer demand, according to industry experts. Online travel aggregators (OTA) have already observed flat growth in volumes of domestic ticket sales during the Diwali period.

Online booking portal Cleartrip has seen slowdown in the volume growth of advance bookings for Diwali. In 2019, the OTA’s 60-day advance booking volumes for Diwali were up 15% from a year ago, while in 2018, volumes for 60-day advance bookings were 22% higher than in 2017, said Balu Ramachandran, senior vice-president, Cleartrip. “This year, the (60-day) advance purchase pricing has been significantly more expensive than the closing pricing (of 15 days leading up to Diwali). The advance pricing for Diwali period has also been significantly higher, than that of a year ago… this could have impacted volumes,” Ramachandran said. The 60-day advance air fares increased by 15% for Diwali this year, compared with 2018, while prices had risen by 6% last year compared with 2017, Ramachandran said.

Meanwhile, a spokesperson from MakeMyTrip indicated that domestic booking volumes so far have shown flat growth for the October-December period, following a similar booking pattern as the previous year. “Given the strong headwinds faced by the Indian aviation industry, there has been a trickle-down effect on the fares of domestic routes that are currently priced 15% higher than last year, for the winter season (October-December)… Among popular routes, Delhi to Bangalore has seen a 70% year-on-year increase in airfares,” the spokesperson said.

A senior executive from another major OTA also told FE that volume growth of ticket sales during Diwali have been flat compared to last year in some of the more busy sectors, and even seen a dip in some other sectors.

“Ticket sales for the festive season are ongoing so it is still early to tell definitively, but one can safely predict that the sales this season will not be too good. Initial estimates point out that sales should be at least 6-7% down from last year,” said aviation consultant Mark Martin.

Industry experts said domestic sectoral issues have contributed to the tepid volume growth. “The aviation sector has seen a slowdown since earlier this year due to a combination of factors — the sector is very closely correlated with the economy, so I think, a slowdown in volume growth, could be because of the overall slowdown in the economy. There’s also the fact that Jet Airways is out, from which the domestic sector is yet to recover fully,” said Dhiraj Mathur, aviation expert and former partner, PwC India. Jet Airways was grounded on April 17. According to the latest data by the Directorate General of Civil Aviation (DGCA), domestic air traffic in September grew a meagre 1.18%.

Bookings for international travel have seen encouraging growth, with MakeMyTrip registering 40% growth in international bookings between October and December. “As the festive season approaches, we are expecting an uptick in the number of outbound travellers — and this can also be attributed to airfares that are 5% lower this year — encouraging many to travel to destinations including Dubai, Bangkok, Phuket, Istanbul, Toronto, Athens, Hanoi and Ho Chi Minh city,” the spokesperson said.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1Office rentals stagnate in Delhi, Mumbai, but shoot up in Bengaluru, Hyderabad
2September quarter results: NPAs and provisions spike for private banks in Q2
3Online food & grocery retail may touch $10.5 billion by 2023