Airfares may soar as advance bookings go up, fall in Covid cases, jabs to aid demand

Domestic airfares are set to jump during the festive season. Airlines, anticipating a surge in travel, expect ticket prices to stay buoyant through the period. While this will generate much-needed income for cash-strapped carriers, passengers will have to pay more. That isn’t likely to dissuade people who’ve been stuck in place due to the pandemic for over a year. “We do not see fares coming down because there is demand for travel and it will stay strong, especially since our infection numbers are under control and vaccination numbers give confidence,” said an airline executive, who didn’t want to be identified.

Another said the relaxation of fare curbs by the government may not mean lower prices. “Fare band relaxation may not mean low fares because we are seeing an increase in demand for travel and this should stay,” the person said. “Also, fare is regulated as we approach closer to the date of travel, which is when airlines used to charge extra. Now that is gone — fares may not be as low as earlier.”

The government said last week that price caps would apply only for flights booked up to 15 days in advance. There will be no limits for flights booked 16 days and more in advance. Fare bands had been imposed after domestic flights were resumed following the relaxation of national Covid lockdown last year. Both the upper and lower fare limits were removed for flights beyond 16th day recently. Currently, regulated fares are up to 35% higher than non-regulated fares.

The government has also relaxed the capacity limit for airlines and allowed them to use up to 85% of pre-Covid capacity from 72.5%. They are working on adding more flights.

Last year’s festive season was a washout for airlines as few travelled due to Covid concerns. Passenger numbers have been climbing over the past few months as the second wave has receded and more people have got vaccinated. Experts expect a sharp uptick in this trend during the October-December festive season.

To be sure, some states do insist on Covid negative tests, especially from those coming from hotspots.

“If there is no third wave and states relax the RT-PCR norms, this festive season could bring the revival of domestic aviation,” said Ajay Prakash, president of the Travel Agents Federation of India (TAFI). “There is demand from travel to leisure destinations but business travel is still subdued.”

Industry insiders also say that advance bookings are gaining pace.

“Advance bookings that happened during September 18-21 for the Diwali week (November 4-7) are nearly 30% higher than the advance bookings that happened in the first week of September for the same period,” said Nishant Pitti, CEO and cofounder, EaseMyTrip. “The demand has picked up and this indicates the robust demand coming in from travellers since the fare cap relaxation.”

Airline sources say that they expect passenger numbers to increase, as India’s 300 million middle class — which forms the bulk of the population that flies — gets fully vaccinated. India has fully vaccinated about 220 million people and may reach 300 million by the middle of next month — a large number of them would constitute those who travel by air.

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