Mumbai: An increase in the surcharge on Aviation Turbine Fuel (ATF) and global crude prices has sent up airfares for most popular tourist destinations, such as Goa, Shillong, Cochin, Guwahati and Port Blair. Airlines said there has been an average increase of 24%, compared to this time last year.
Industry watchers said despite the steep hike in airfare, there has been a spike in bookings to these destinations, mainly due to the monsoon discounts being offered by domestic airlines. On Wednesday, SpiceJet announced all-inclusive one-way fares starting at ₹999 for select non-stop domestic flights. Go Air, Air Asia, and Vistara are all offering monsoon discounts.
Aloke Bajpai, CEO and co-founder of travel marketplace Ixigo, said, “People are busy planning their monsoon getaways. Despite the increase in airfare, bookings to tourist destinations are increasing. Monsoon is usually a lean travel season. These fares will help in spurring travel demand,” said Sharat Dhall, president, Yatra.com. Industry analysts said airfares in India had long broken free of their seasonal, cyclical nature thanks to aggressive all-year offers by airlines.
Indian carriers struggle
Malaysia Airlines recently ended a 72-hour sale in which return tickets (excluding taxes) to Kuala Lumpur were as low as ₹14,000 and business class fares began at ₹35,000. Budget carrier FlyDubai is offering promotional fares of ₹32,000 to ₹36,000 to destinations such as Oman and Tanzania.
While profits of international carriers have been strong since 2015 despite wide regional variations, Indian carriers are struggling to remain profitable, despite filling nearly 90% of their seats and benefiting from an over 100% increase in the number of domestic passengers over the last four years.
Data from travel firm Rome2Rio shows India is one of the cheapest domestic airline markets in the world, with an average fare of 13 cents per kilometre flown. This is less than half the 27 cents-per-km average in China and the United States of America.
“Only 0.3% of the 1.3-billion population currently travels abroad for a holiday every year, a fraction of the estimated 100 million Indians who could potentially afford to do so,” an analysis of household incomes by aviation consultancy Centre for Asia Pacific Aviation (CAPA) said.