Contraction in capacity coupled with a spurt in fares has pushed air travel out of reach for most middle-class Indians who have gone back to travelling by train.
The exit of Kingfisher Airlines, once the country’s second-largest carrier, last year took away a major chunk of seats out of the domestic market, resulting in other airlines hiking fares at will. As airfares increased by as much 30% in 2012 compared to the previous year, air travel took a big hit.
Air traffic fell by nearly 3% in the first eleven months of 2012 against a year ago. The month-on-month decline in November 2012 was an even sharper 7.3%.
“More and more families are opting to travel by train. Why would a family waste Rs. 60,000 on travel when they can do the same thing for Rs. 10,000?” said Rajji Rai, chairman of Swift Travel International Ltd.
Rai seems to have a point.
The cheapest plane ticket on the Delhi-Mumbai sector for travel on February 1 (January to March is considered the leanest period for airlines) was priced at Rs. 7,600, which means a family of four would have to shell out Rs. 30,400 for a one-way trip and Rs. 60,800 for a round trip. Whereas, a Delhi-Mumbai train ticket costs Rs. 1,550, which comes to Rs. 12,400 for a round trip for the same family.
The cheapest air ticket on the Delhi-Goa route is priced at Rs. 8,300. Travel by train costs less than Rs. 1,500.
“Over 30% increase in fares in 2012 against 2011 is certainly impacting the bottom of the pyramid — the price sensitive traveller — and the impact is visible,” said Kapil Kaul, chief executive officer, South Asia, aviation consultancy firm Centre for Asia Pacific Aviation.
“There is nothing like low-cost carrier (LCC) any more. Vacations to long-haul destinations have given way to ‘near vacations’ while families who would earlier plan two small vacations now settle for one slightly bigger outing,” Swift Travel’s Rai said.
“In India, there is no concept of low-cost terminals. Our expenses are the same as full service carriers — we buy fuel at the same price, pay the same taxes. Our focus is keeping our flights on time and providing good service,” said a senior executive of an LCC.
“Fares go up every minute. By the time you get to the airport from home, fares have gone up drastically. There’s a complete mismatch between demand and supply. Low-cost carriers have become the same as legacy carriers,” said Rai.