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Diwali travel: Airfares expected to rise, book air tickets now

Domestic airlines capacity, measured in terms of available seat kilometre, stood at 13.1 billion during June 2019 as compared to 12.7 billion exactly a year ago.

The domestic airfares in the 0-15 day window are on the surge.

If you plan to fly out for a holiday or to meet family and friends in October during Diwali, then book your air tickets now because domestic airfares are currently flat in comparison to the 2018 festival season, as Jet Airways’ capacity has found its way back into the market.

Experts point out that fares beyond the 0-15 day window remain unchanged over last year, with low-cost carriers like SpiceJet and IndiGo quickly inducting aircraft into their fleets. As per travel portal Cleartrip, the average domestic fares outside the 0-15 day window remain flat on major routes.

“Our data shows that average airfares during the festival season are the same levels as last year. All the capacity occupied by Jet was back into the domestic market by July-end,” Balu Ramachandran, head, air & distribution, Cleartrip, pointed out.

Domestic airlines capacity, measured in terms of available seat kilometre, stood at 13.1 billion during June 2019 as compared to 12.7 billion exactly a year ago.

SpiceJet said it doesn’t expect significant rise in fares going into the next quarter. “India is a price sensitive market. What you can do with fares is limited . However, there is no risk of discounting. The danger of fares coming down as compared to last year is not there with removal of some capacity,” SpiceJet’s chief financial officer Kiran Koteshwar explained.

Analysts believe fares, which are witnessing a downward trend, could rise closer to the festival season. “We expect the fares to moderate further in FY20 though not to the lows of FY19 as grounded capacity of Jet Airways finds its way back in the system through SpiceJet and Vistara, and planned capacity addition by IndiGo,” brokerage firm Axis Capital noted.

However, the domestic airfares in the 0-15 day window are on the surge. Airfares on five major routes – Delhi-Mumbai, Delhi-Bengaluru, Delhi-Chennai, Delhi-Hyderabad and Delhi-Kolkata – have climbed up 39% year-on-year for travel during August-end, data provided by Yatra.com showed.

The is mainly due to the festival season which starts with Onam in the south on September 1, followed by Ganesh Chaturthi on September 2 in Maharashtra. Navratras and Diwali will be celebrated in October this year.

The June-August quarter is usually considered to be a lean period for air travel. IndiGo management had last month said the airline was witnessing lower fares in the 0-15 day booking window. But the situation seems to be improving.

The heavy rains in southern parts of the country have also led to spike in ticket prices, experts pointed out. During Q1FY20, the fares were higher to the tune of 30-40% y-o-y due to collapse of Jet Airways and summer vacations. Jet had a fleet of 119 aircraft at the end of December 2018 and commanded 14% share of the domestic aviation market before it closed operations on April 17 due to financial crisis. Domestic passenger traffic growth fell to 3.2% y-o-y in the first half of calendar year 2019 from double-digit increase in the last four years.

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