Despite a substantial rise in the fuel bill, airlines have priced their summer fares very attractively.
Despite a substantial rise in the fuel bill, airlines have priced their summer fares very attractively. Fares are comparatively lower for the coming holiday season than they were last year on several routes. Surprisingly, this is true even for the top six routes which account for 70-75% of the overall traffic. A senior official from Air India told FE it was important to increase the passenger load factor. “Offering discounts for a certain period before the holiday season is one way to do this,” he explained. The executive added that most carriers currently have capacity that is higher than demand. “Competition has more than intensified and this has prompted the discounts before holiday period,” he said.
According to online travel booking portal MakeMyTrip, the average airfare on the Delhi to Mumbai route — the busiest one — is lower by about 8% compared to the same period last year. This is for travel between May 20 and June 30.
The average fares during the same period on other routes like Delhi to Bangalore are lower by about 5% year-on-year to Rs 3,879, while on the Delhi-Hyderabad route they have dipped by 6% to Rs 3,161. The steepest fall appears to be on the Delhi-Kolkata route, where average fares are lower by 20% at Rs 3,443. “Airfares in the domestic sector have come down substantially for the summer holiday period. Given much of the booking is done in advance and the airlines also have excess capacity offering discounts has been the only option to attract the customers,” Jyoti Mayal chairperson, Airline Council, told FE.
Sector analysts say the excess capacity stems from several carriers having expanded their fleets. Consequently, these airlines have introduced additional flights as part of their summer schedules. The strategy appears to be to attract more passengers by pricing fares attractively.
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According to online ticket booking platform Ixigo, the fall in average price of tickets has been substantial. In the April to June period, average ticket prices on routes like Mumbai to Delhi and Hyderabad to Bangalore fell by 30% compared with the same period last year, a spokesperson for the platform said.
Indigo — the biggest airline by market share — launched its summer sale for three days on April 10 for May and June. The special fares offer will be available on a first come, first served basis and are non-refundable. The airline has also been offering discounted fares for destinations in ASEAN countries as well. “IndiGo will continue to offer more flexibility of choice for our customers to meet the requirements of both business and leisure travellers wherever they demand it,” said Sanjay Kumar, chief commercial officer, IndiGo.
Most airlines offer discounts before the holiday season since that allows them to use up a part of the capacity on offer. Full-service carriers like Jet Airways, Air India and Vistara have also been offering discounts on domestic routes.