Airfares take off
Airfares have dropped after soaring in November but will continue to be volatile a while.
Airfares soar
In early November, spot airfares on key routes such as Delhi-Mumbai, Mumbai-Bangalore, and Mumbai-Kolkata started showing a secular uptrend, and soared to dramatic heights by mid-November. For instance, the minimum price of a Delhi-Mumbai economy class ticket rose to over Rs 16,000 from around Rs 5,000 during the off-peak season. Similarly, the economy airfare on the Mumbai-Kolkata route was quoting above Rs 18,000, up from around Rs 8,000 a month ago.
... Because of aircraft, runway shortage...
A couple of factors had impacted the capacity on key routes. First, Kingfisher and Air India grounded some aircraft because of a shortage of staff and technical factors. Then, airline operations were hit due to the closure of the main runway in Mumbai for six days. "As a result, on the Mumbai-Delhi sector, the busiest route in the country, demand outstripped supply by almost 15 per cent," says Ankur Bhatia, Executive Director, Bird Group, a technology provider to the travel industry.
… But the regulators are concerned…
The Director General of Civil Aviation, or DGCA, has ordered a probe into the matter and issued notices to airlines asking them to explain the reasons for the high fares. DGCA is also examining the possibility of introducing a "fare band" model where the prices are allowed to fluctuate in a range in the eventuality of a demand-supply mismatch
… And the volatility in fares may persist
Airlines have cut fares after the warning from DGCA but they are still higher than the average rates. For instance, the economy Delhi-Mumbai fare, at Rs 6,000, is 20 per cent higher than in October. And there is likely to be an upward pressure on fares, particularly during the festive season, say experts. Aloke Bajpai, founder of online travel search engine iXiGo, also blames the high prices of aviation turbine fuel, or ATF. "Due to the recession, a lot of airlines scaled back capacity in the last two years. Even now, the capacity additions have not been rapid. In addition, ATF prices have shot up 15 per cent in the last three months," he says.
In early November, spot airfares on key routes such as Delhi-Mumbai, Mumbai-Bangalore, and Mumbai-Kolkata started showing a secular uptrend, and soared to dramatic heights by mid-November. For instance, the minimum price of a Delhi-Mumbai economy class ticket rose to over Rs 16,000 from around Rs 5,000 during the off-peak season. Similarly, the economy airfare on the Mumbai-Kolkata route was quoting above Rs 18,000, up from around Rs 8,000 a month ago.
... Because of aircraft, runway shortage...
A couple of factors had impacted the capacity on key routes. First, Kingfisher and Air India grounded some aircraft because of a shortage of staff and technical factors. Then, airline operations were hit due to the closure of the main runway in Mumbai for six days. "As a result, on the Mumbai-Delhi sector, the busiest route in the country, demand outstripped supply by almost 15 per cent," says Ankur Bhatia, Executive Director, Bird Group, a technology provider to the travel industry.
… But the regulators are concerned…
The Director General of Civil Aviation, or DGCA, has ordered a probe into the matter and issued notices to airlines asking them to explain the reasons for the high fares. DGCA is also examining the possibility of introducing a "fare band" model where the prices are allowed to fluctuate in a range in the eventuality of a demand-supply mismatch
… And the volatility in fares may persist
Airlines have cut fares after the warning from DGCA but they are still higher than the average rates. For instance, the economy Delhi-Mumbai fare, at Rs 6,000, is 20 per cent higher than in October. And there is likely to be an upward pressure on fares, particularly during the festive season, say experts. Aloke Bajpai, founder of online travel search engine iXiGo, also blames the high prices of aviation turbine fuel, or ATF. "Due to the recession, a lot of airlines scaled back capacity in the last two years. Even now, the capacity additions have not been rapid. In addition, ATF prices have shot up 15 per cent in the last three months," he says.
