Why are Indian Airfares so High?

Indian Airfares

India has seen a 41% increase in air fares. What is the reason behind the soaring prices?

Imagine you are planning a trip from Mumbai to Delhi tomorrow via a non-stop flight. You go to the booking section and get a mini heart attack! Why? Well, because of the price tag. 

Booking a ticket from Mumbai to Delhi just a day prior can cost you anywhere between Rs 15,000 and Rs 26,000. And guess what? This route happens to be India’s busiest domestic one, according to Moneycontrol.

Now, let’s compare it to the US. Take the busiest route there, from Las Vegas to Los Angeles. The airfare can be as low as Rs 1,700 and go up to Rs 6,800. That’s quite a difference, isn’t it? 

Also, it seems like we are paying a premium for flying in the Indian skies.

So, why are airfares in India so expensive? 

Let’s find out!

What’s Happening?

The Airports Council International (ACI) examined around 36,000 routes in the top aviation markets of the Asia-Pacific and the Middle East and came up with some statistics.

The data revealed a staggering increase in international airfares, up by 50%. On the other hand, domestic routes saw a more modest increase of less than 10%. Moreover, India took the lead and saw a remarkable 41% increase in air fares, followed by the UAE at 34%, Singapore at 30%, and Australia at 23%. 

Why is India at the Top of the List?

To understand why airfares in India have skyrocketed, let’s dive into the backstory. In 2020, the COVID-19 pandemic caused a significant decline in travel, hitting the aviation industry hard. To entice passengers, airlines began offering cheaper fares compared to their competitors. However, airlines started charging higher prices for less popular destinations with lower bookings.

In response, the Indian Aviation Ministry stepped in and implemented upper and lower price caps on airfares — this regulation aimed to ensure fair pricing for travellers. However, as the situation started to improve in mid-2022, the caps were lifted. With no regulatory control, airlines were free to set their own prices. In this competitive space, ticket prices fluctuate based on market demand.

So, why is India topping the list of expensive airfares? It’s due to a combination of high demand and capacity constraints. One contributing factor is the bankruptcy of Go First, formerly known as GoAir. Before filing for bankruptcy, Go First operated around 180 to 185 flights daily and carried about 30,000 passengers, as reported by Business Today. The bankruptcy was caused by engine malfunctions, specifically those imported from Pratt & Whitney, resulting in grounded planes. A similar situation occurred with IndiGo, but since their fleet is larger and they have another engine supplier, they managed to survive. However, even IndiGo is not operating at full capacity.

So, with high demand but limited capacity, airfares in India have surged. 

What’s Next?

The issue of rising airfares in India has been a concern for a while, prompting the intervention of the aviation ministry. This intervention has led to a significant decrease in airfares over the last week, with prices dropping by approximately 60%, as reported by the Economic Times.

However, the airfares seem to stay the same until airlines are able to operate at their full capacity.

That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!

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