Pinching the pocket: Why domestic airfares are skyrocketing by up to 229% on some routes – Times of India

Rising airfares

AirfareLack of competition has led to a tripling of traffic on certain domestic routes in India in the current financial year, leaving only one or two airlines operating on those routes. For example, fares for non-stop flights between Srinagar and Leh increased by 229% between April and November, compared to an average increase of 21% across the country, according to travel portal Ixigo to ET. According to the data.
The number of flights on the Srinagar-Leh route has also reduced from 469 to 78 during this period. Air India It is now the only carrier on the Srinagar-Leh route after GoFirst, which operated most of the flights last year, went bankrupt in May.
Similarly on Jaipur Goa route Indigo is the only airline to offer non-stop flights, which has led to a 135% increase in airfares between April and November. Other routes, such as Srinagar-Chandigarh and Dehradun-Mumbai, have also seen fare hikes of 113% and 57% respectively.

Rising airfares

Rising airfares

Out of about 1,100 air routes in India, about 800 are monopolized by a single airline. IndiGo operates around 500 routes, while the Air India Group operates around 200. Spice Jetwhich used to connect small towns, has reduced its capacity due to operational and financial problems. The market is largely dominated by IndiGo and Tata Group airlines, which control 90% of the domestic air passenger market.

Experts predict that this duopoly will lead to a massive increase in airfares, which have historically been low due to intense competition. Current rent levels in India, even after accounting for the impact of the pandemic, are low compared to mature international markets. However, some believe that consumers can still benefit from healthy competitive intensity among the major carriers.
To deal with rising air fares, the government has set up a Tariff Monitoring Unit under the Directorate General of Civil Aviation (DGCA) to regularly monitor air fares on selected routes. The objective of this unit is to keep air fares under control and protect the interests of consumers. Government efforts to regulate fares have been largely unsuccessful in the past, but setting up a tariff monitoring unit could change the situation.
Read from ET About rising airfares
The Tata Group and IndiGo have placed orders for delivery of around 1,000 aircraft over the next decade, which is expected to increase capacity and potentially bridge the supply-demand gap. Additionally, Civil Aviation Minister Jyotiraditya Scindia has urged airlines to implement self-monitoring mechanisms for airfares and maintain fair prices on certain routes.

Business news,Vistara,Spice Jet,Indigo,Indian Airlines,Domestic airfares,Airfare,Air India

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