Air Fares Skyrocket As Year-end Travel Demand Peaks

For December, EaseMyTrip has reported an average increase of 30-40% in airfares for December, with even higher increases of 50-60% on popular routes like Delhi-Mumbai, Delhi-Chennai, and Delhi-Bengaluru.

“The ticket prices for popular international routes such as Mumbai-New York, Delhi-London and Delhi-Dubai have increased by approximately 10%, 20% and 50%, respectively. More specifically, there has been a 100% increase in prices for destinations such as Goa, Delhi, Mumbai and Bengaluru for 30, 31 December and 1 January," Nishant Pitti, chief executive office and co-founder, EaseMyTrip said.

On the other hand, spot fares for a Mumbai-Delhi flight are around ₹14,000-27,000, up from ₹15,000-20,000 in November, ₹5,500 in September and ₹9,000 in May.

Spot fares on a Mumbai-Bengaluru flight currently cost ₹4,000-14,000, compared to ₹4,000-17,000 in November and ₹2,000 in September.

Spot fares on the Delhi-Kolkata route have soared to ₹15,000-22,000 from nearly ₹10,000 in September.

Similarly, one-way airfares for advance bookings in December on several domestic routes have doubled, according to online travel operator Ixigo.

There has been more than a doubling of air fares compared to last year on routes such as Delhi-Mumbai from ₹2,710 to ₹ 5,862, Delhi-Patna from ₹ 2,304 to ₹ 5,214, and Hyderabad-Chennai from ₹ 1,936 to ₹ 4,948, Ixigo data showed.

The fares have also jumped by 50-90% for routes such as Hyderabad-Bengaluru, Delhi-Kolkata, Kolkata-Guwahati, Bengaluru-Kolkata, and Delhi-Goa, among others.

“For the Christmas and New Year Period, Indian travellers don’t appear to be deterred by higher prices, with the average price for a return domestic economy flight approximately ₹15,840—an increase of about 52% compared to 2019. A return economy flight to Asia is approximately ₹36,834, an increase of about 59%, and a return economy long haul flight is about ₹80,006—an increase of about 59%," Tarun Tahiliani, India country manager at travel search engine Kayak said.

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Despite the rise in average airfares for a route such as Delhi-Goa to ₹9267 for December from ₹5586 in the same period a year ago, travel demand is strong, and Goa has been the undisputed most popular destination for 2022.

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Since October, the onset of the holiday and festive season, airfares have surged, leading to a shift of some travellers toward trains and buses.

“Airfares in 2022 were higher by 20-30% due to a rise in oil prices leading to a shift in preference for modes of transport for travellers from air to both trains and buses. We have seen an average increase of 15-20% in bookings for 2AC in the last few months. Train seat waitlist is also at an all-time high due to peak demand," said Rajnish Kumar, co-founder and group chief product and technology officer of Ixigo.

According to Ixigo, there has been an average 30% month-on-month increase in 2AC train bookings for the New Delhi-Patna route since October, 26% for Lucknow-New Delhi, 15% for New Delhi-Jammu, and 12% for New Delhi-Varanasi.

“Train travel has also picked up in the post-pandemic era, and we witnessed a 70% year-on-year increase in bookings for 30, 31 December and 1 January. 2AC train bookings have increased by approximately 30% compared to last year, and there has been a general increase in ticket prices. Overall, train bookings have grown eight times compared to 2019," Pittie said.

A similar shift has also been seen in bus travel. Bus portal Abhibus has seen more than 100% growth in bus travel searches in 2022 for destinations such as Tirupati, Goa, Manali, Nagpur, Rajkot, Surat, Amritsar, Varanasi among others have shown more than 100% growth in bus travel searches compared to the same time last year.

As the Indian aviation sector enters 2023 with volatility in oil prices, a weak rupee, and restricted capacity due to a shortage of engines and aircraft parts amid high demand, the airfares are expected to remain steep, analysts said.

“The forecast for next year entails a continued increase in prices due to the weakening of the Indian rupee against the US dollar, coupled with the rise in fuel prices. Airline occupancy will further add on to the rise in airfares, as the demand continues to be stronger than the supply," Pittie said.

Credit rating agency Icra has warned that while airlines have been increasing yields, it has not been adequate to offset the impact of the rising jet fuel prices. The earnings recovery for domestic airlines will be slow-paced due to elevated ATF prices in addition to the rupee depreciation against the US$ amid a heightened competitive environment, it said.