Airfares on key domestic routes during Christmas and New Year have so far not seen the usual holiday season spike, largely due to quick capacity addition by airlines.As per data provided by travel portal Yatra.com, airfares on major sectors are higher by up to 8% year-on-year during Christmas and New Year this time as compared to 15-20% y-o-y jump witnessed for bookings same time last year.
For instance, a return fare on Delhi-Mumbai route is dearer by 8% from last year to Rs 6,840 for the journey undertaken between December 24 and December 31.
Similarly, a two-way travel between Mumbai and Bengaluru could cost Rs 5,910 for travel, up 7.5% y-o-y for the trip during last week
An airline executive pointed out that Jet had started cancelling flights due to cash crunch around this time in 2018, leading to fare hikes by competitors. "Yields were up by 2-3% for the airlines in July-September period last year due to stronger fares. Trouble at Jet had started by then, which gave airlines opportunity to command higher fares. The financial results, however, were impacted by high fuel costs and currency depreciation," the executive said.
Travel site EaseMyTrip said it is experiencing flat fares on popular routes for the Christmas and New Year period. "We are not witnessing much difference in airfares for the year-end in comparison to last year. Goa, one of the most popular destinations for travellers during winter, is seeing similar fares while flights to Udaipur and Andamans have reduced 10-20% y-o-y," said Prashant Pitti, executive director, EaseMyTrip.
Analysts noted that airfares in November 2019 were down 11% y-o-y due to quick capacity addition by airlines. "Increasing capacity has kept fares under stress even during the festive season when travel sees an uptick. We expect fares to remain subdued in near term on double-digit increase in capacity announced by airlines for the winter schedule and lower economic growth," analysts at Axis Capital explained.
Balu Ramachandran, senior vice-president, Cleatrip, said airlines are offering lower fares closer to the date of travel for filling up seats.
"Since July 2019, fares for bookings made over 15 days of travel date have increased by 10% y-o-y whereas the fares for booking made within 15 days of travel have decreased by 2%," Ramachandran said.
Domestic passenger traffic grew at 3.8% y-o-y in October 2019 on the back of Diwali festival demand. The airlines capacities in FY20 so far has increased 2% y-o-y due to grounding of Jet Airways.
Sabina Chopra, co-founder and COO, corporate travel & head industry relations, Yatra.com, expects airfares to rise sharply for destinations such as Jaipur, Kerala and Coorg during Christmas and New Year.
Daniel D'Souza, president and country head leisure, SOTC travel, noted, "With an increasing number of Indians investing in unique holiday experiences, there has been a significant rise in queries and bookings for the season."