Flight prices soar high on demand, stagnant supply - Hindustan Times
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Flight prices soar high on demand, stagnant supply

Jun 09, 2023 01:14 PM IST

The demand is around 9% higher now, at 418,619 (the number of passengers flown on Wednesday) as compared to 383,000 per day during the same month in 2019

Record demand and stagnant supply in the ongoing peak season have resulted in high ticket prices on domestic flights, an HT analysis has shown.

Aeroplane taxing through the runway at Terminal 2 in Mumbai. (Prashant Waydande/ HT File Photo)
Aeroplane taxing through the runway at Terminal 2 in Mumbai. (Prashant Waydande/ HT File Photo)

The analysis, based on various sets of government data by HT shows that airlines currently offer about 460,000 seats per day in the current month, which is almost similar to what they were offering in June 2019.

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The demand, however, is around 9% higher now, at 418,619 (the number of passengers flown on Wednesday) as compared to 383,000 per day during the same month in 2019.

Go First’s suspension has strained capacity, as has the issue with Pratt and Whitney (P&W). Prices starting spiking in May, and continue to be high in June. On May 29, the parliamentary panel on tourism, transport and culture sought various details from all airlines on their dynamic pricing.

An airline official, familiar with proceedings at the meeting, said the committee wanted to understand how fares are fixed, and how they can be “made reasonable”. The panel also discussed the gap in demand and supply, the person added.

Civil Aviation minister Jyotiraditya Scindia on Monday met with the Airlines Advisory Group on the increased airfares on certain air routes, particularly those in which Go First operated, and directed airlines to self-monitor ticket prices.

He also said that the airfares were being monitored by the Directorate General of Civil Aviation (DGCA) on a daily basis and that they had fallen by between 14%and 61% on five routes (Delhi to Pune, Mumbai, Ahmedabad, Leh and Srinagar) on Tuesday as compared to Monday.

Delhi-Pune is one route where Go First was active.

The one way fare of a Delhi- Mumbai flight on Thursday for travel on Friday was at least 18,000 and that for Saturday was at least 12,000. Similarly, the one way fare on Thursday for a Delhi-Ahmedabad flight was at least 17,000 for Friday and 12,000 for Saturday.

Mark Martin, founder & CEO at Martin Consulting said: “The increase in airfares is a result of increasing demand and shortage of aircraft. Today we are down by around 300 aircraft due to P&W engine issues, unavailability of Go First, poor performance of SpiceJet. Air India too has 26 aircraft grounded. We don’t have a system to effectively monitor air ticket pricing in the country. We are the largest aviation market in the world now. It’s the government’s duty to come up with a mechanism.”

Ajay Prakash, president of Travel Agents Federation of India (TAFI) said, “It is a very unhappy situation when the airlines are only thinking of profits at a time when 8% market capacity is out due to unavailability of Go First and that too in the peak summer travel season.”

“High demand is the main reason for high fares. We anticipate the demand to continue and fares to remain firm,” said an airline executive, who did not want to be identified.

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