Airfares have moderated in 2024 from 2023: Civil Aviation minister in Lok Sabha

Civil Aviation Minister of State Murlidhar Mohol told Rajya Sabha that the airfares have moderated in 2024 compared to 2023 as there was a notable decline in air ticket prices in various routes during festival seasons this year. It is to be noted that airfares in India are dynamic and is a function of demand and supply.

He noted that airfares are not regulated by the government, giving airlines the flexibility to set prices according to their operational requirements within the boundaries of established regulations.

“…the government generally refrains from regulating airfares to maintain market competitiveness, however, it remains vigilant, and the government intervenes to shift capacity from one sector to another to prevent exorbitant pricing to ensure passenger comfort and welfare,” he said in a written reply on November 25.

Through continued collaboration with airlines, Online Ticketing Agents (OTAs), and monitoring airfare movements by the government, Mohol noted a moderation in airfares in 2024 compared to 2023.

Airlines have been advised to prioritise passenger interests and ensure fair pricing, particularly during festive periods where reductions in airfares have been observed across different sectors.

Airfare trends in India are influenced by various factors such as seasonal fluctuations, fuel prices, aircraft capacity, competition, holidays, festivals, weekends, and events.

Operational constraints at airports also play a significant role in pricing dynamics, with limited capacity and high demand leading to fluctuations in airfares.

“Given the complex dynamics of the Indian aviation industry, government is playing the role of a facilitator by way of creating enabling environment to support the growth of the sector,” Mohol said.

An Airports Council International (ACI) study conducted a month ago revealed that India has experienced the second-highest surge in domestic airfares in the Asia-Pacific (APAC) and West Asian regions. In the first half of 2024, airfares in India rose by 43 per cent compared to pre-pandemic levels in 2019, with Vietnam recording the highest increase at 63 per cent. In terms of international airfares during the same period, India ranked third in fare hikes, with the United Arab Emirates (UAE) and Malaysia taking the lead.

These findings were discussed during a board meeting held on Monday, where the study analyzed airfare trends on over 60,000 routes across 19 countries. This provided valuable insights into the post-pandemic recovery of the aviation industry in the region.

Among domestic markets, Vietnam led in airfare increases, followed closely by India. Malaysia (36 per cent), Thailand (26 per cent), and Australia (21 per cent) also saw notable increases, especially in countries with a significant domestic market.

According to recent reports, India and Vietnam experienced a 16% increase in airfares, ranking them in third place globally. The UAE topped the list with a 22% surge in airfares, followed by Malaysia (21%), Australia (14%), and Thailand (7%). The rise in airfares was most notable among low-cost carriers. On average, airfares across the region increased by approximately 10%.