Relief for domestic fliers as ticket prices fall by 8% in festive season

Airlines have dropped fares up to 8 per cent in the run-up to Diwali, reported The Economic Times (ET). This comes after the airlines failed to find enough buyers for the tickets they had priced higher in the hopes of profiting from the holiday rush.

Domestic carriers have announced multiple sales in recent days after raising ticket prices in anticipation of stronger demand this year, amid a supply crunch due to Go First's bankruptcy and grounding of aircraft due to Pratt & Whitney engine issues, it added.

"This is probably one of the rare years when there have been three sales in the festive season quarter, demonstrating that airlines completely misread the demand," a SpiceJet executive told ET.

 

According to data from the civil aviation ministry, the average occupancy of airlines has remained below 85 per cent, despite airlines' expectation of a 90 per cent load during the peak season, while industry executives have reported a 10-15 per cent decline in yield compared to last year's festive season. Airline yield is generally expressed as revenue earned per passenger for each kilometre. It is also a key indicator of profitability.

The price reduction in airfares comes at a time when airlines are incurring higher costs, including jet fuel and airport charges, which they are unable to make up through fares.

Gaurav Patwary, vice-president of air travel at online travel portal Cleartrip, told ET that fares in the week before Diwali have remained flat compared to the previous year, at 6,500 on average. The October-December period is generally the busiest for domestic carriers, with major festivals such as Durga Puja and Christmas, along with New Year boosting air traffic.

Ameya Joshi, founder of aviation blog Network Thoughts, said his research shows that for the first seven days of November, traffic decreased 3.5 per cent over the previous month, while airlines added 1.2 per cent departing flights during this period. 

Compared to November 2019, there were 24,083 fewer passengers and 152 fewer departing flights per day, he was quoted as saying by ET.