HT spoke with Debayan Sen, India Practice Leader with the US-based aviation consultancy firm Landrum and Brown Worldwide Services, on the recent drop in the number of passengers travelling in domestic flights in the country.
Do you think a section of fliers is giving up on air travel because it has become unaffordable?
Definitely. Bargain fares that were offered by domestic airlines helped leisure travellers with flexible travel schedules. These fares did not help the business traveller as much because of the uncertainty associated with corporate travel and thus, business travellers were typically paying much higher when compared with last year’s fares. Rise in airfares, compounded by fiscal tightening by various corporate because of the slow economy, has resulted in this drop in traffic.
Are the domestic airfares in India on par with or more expensive than matured aviation economies?
On an absolute basis, the average fare per kilometre offered by Indian full service carriers is on par with international aviation economies and even lower, when compared with some countries. But factoring in purchasing power parity, it is definitely more expensive for an average person to fly in India.
Does the decline indicate end of the honeymoon for Indian fliers that began with the low-cost revolution in 2004?
Possibly, for a while. This decline won’t end unless the cost of operation for the airlines reduces so that they can pass on the benefit to the fliers. Unfortunately, the operating cost for domestic airlines in India is higher when compared with other large aviation markets. Factors such as the high price of fuel are responsible for the high operation cost environment that prevails in India.
Do you think the new govt policy on unbundling airfares could worsen the decline?
It really depends on the way the fares are going to be structured going forward. It is quite difficult to balance the interests of airlines as well as passengers. The initial roll out of additional fees could have a short-term impact on traffic, but in the long run, fliers will adjust their travel habits according to the new charges, resulting in a possible recovery.