Domestic Flight Costs Soar Amid Peak Season and Airline Troubles

As the height of summer travel approaches, consumers are facing a steep increase in domestic airline ticket prices. Airfares are seeing a spike between 20-25%, driven by a confluence of airline operational snags, particularly with Vistara, and a strong upward trend in travel demand. Experts within the airline industry are battling to ramp up their flight capacities to match the surge, and in some cases resorting to the deployment of larger aircraft normally reserved for international routes to accommodate this boom on domestic circuits.

The tight spot in the aviation sector has been exacerbated by Vistara cutting its daily flight count by 25-30, or around 10% of its total flight capacity. These cuts arrive in an industry already contending with a reduced number of operational aircraft stemming from Go First’s bankruptcy and IndiGo’s grounding of over 70 planes due to engine issues.

Recent data provided by travel portal ixigo indicates that spot fares for specific routes have witnessed a sharp ascent. Prices have jumped by as much as 39% during the April 1-7 timeframe compared to the March 1-7 period. A closer look at this data reveals that one-way spot fares for Delhi-Bengaluru and Delhi-Srinagar have climbed by 39% and 30%, respectively. Meanwhile, Delhi-Mumbai and Mumbai-Delhi routes saw increases of 12% and 8%.

Bharatt Malik, the Senior VP of Air and Hotel Business at Yatra Online, has signaled that the projected average fare surge during the prevalent summer period, which includes both domestic and international flights, will hover around the 20-25% mark. He attributes this particularly steep climb in prices on major domestic routes such as Delhi-Goa, Delhi-Kochi, Delhi-Jammu, and Delhi-Srinagar primarily to Vistara’s 10% reduction in flights.

Malik adds that escalating fuel costs and the burgeoning demand typical of summer travel exacerbate the price hike. Meanwhile, Vistara has publicly committed to maintaining over 300 daily flights throughout the current summer schedule that kicked off on March 31. Consequently, the airline has had to strategically reduce daily flights by up to 30 to manage capacity effectively, retreating to levels akin to those at the close of February 2024.

While ixigo acknowledges the 20-25% fare surge on some routes, the travel portal anticipates that these higher costs are part of a temporary disruption. These fare fluctuations are likely due to last-minute flight cancellations, which should stabilize once flight schedules return to normalcy.

However, Jagannarayan Padmanabhan of CRISIL Market Intelligence and Analytics warns of the potential for substantial impact on travelers, especially given the projected 5-7% increase in airfare predominantly on trunk routes like Delhi-Mumbai and Mumbai-Bengaluru. With much of the travel occurring for leisure and families, a shift towards alternate forms of transport like rail for shorter distances could be a possibility for many.

Anticipated destinations such as Ladakh, Manali, and Goa are facing a 20% rise in flight prices, reflective of a surge in the desire for both staycations and traditional seasonal vacations. To address the increased travel throng, Vistara has deployed larger aircraft like the B787-9 Dreamliner and A321 neo on select domestic routes, both to combine flights and accommodate more passengers.

The current summer schedule sees Vistara operating 25.22% more weekly flights, totaling 2,324. Overall, Indian airlines will conduct approximately 24,275 domestic flights per week starting March 31—an increase of nearly 6% compared to the same period last year.

Interestingly, the number of weekly departures is just 2.30% higher versus the 23,732 flights operated in the winter schedule concluding on March 30, as per the aviation regulator DGCA. Carriers like IndiGo, Air India, and Vistara are expanding their operations during this summer schedule, which will extend from March 31 to October 26, whereas SpiceJet will curtail its flight numbers.

The scenario presents an operational and logistical challenge for airlines to accommodate the heightened demand for air travel this summer season, whilst ensuring prices don’t escalate to a level that significantly detours passengers to alternative travel methods.

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