Airfares rise only a tad this festive season
Airlines, however, not too optimistic with the near 6% increase as bookings decline amid overall slowdown.
“Year on year, the current bookings for this year’s travel during the festive season (Diwali + Dusshera) is about 6% higher than last year,” said Balu Ramachandran, head of air travel business at travel portal Cleartrip.
A spokesperson at Makemytrip said the portal’s data shows a 5% increase in travel bookings as well as fares for the Diwali season.
But airline executives sounded less optimistic. “I am seeing a direct correlation between fares and loads/bookings,” said a senior airline executive.
“For those who have raised fares, bookings have dropped. For those that have kept fares low, bookings may be higher but still not higher in revenue terms. I see an overall weakening of revenue environment compared with the April-June period,” he said.
Jet stopped operating on April 17, running out of funds and unable to raise money to stay afloat. Its gradual cutting of flights and ultimate stoppage of operations took out more than 500 daily flights from the system and created a shortage of capacity.
Fares were up by more than 25% in May, a trend that sustained through the summer and into August. By that time, airlines were temporarily allocated most of the slots of Jet Airways. Capacity started being deployed and fares slumped in September.
An overall negative sentiment has weakened consumption in India, a trend seen especially in a slowdown in the automotive sector. There are fears that this will be spread to the air travel industry, especially in the leisure segment.
“In September, you are getting fares between Delhi and Mumbai for Rs 2,500. This one month has wiped out majority of the gains made in the previous months. We can only hope that the festive season will be healthier in terms of yields,” said a second senior executive at a low fare carrier.