Mumbai: Domestic airfares may not decline much during the second quarter of the current fiscal triggered by strong traffic growth and positive momentum in economy, says a report by ICICI Securities.
"We believe the sequential decline in domestic fares in the second quarter (July-September) 2016-17 will be significantly lower than the usual 15 per cent which we have seen in the past," the brokerage firm said.
According to the report, airfares in domestic circuit "has been unusually stronger than expected with a recovery seen during July/August" and "the decline in airfare is likely be much lower for July-September quarter 2016-17".
ICICI Securities noted that while the strong traffic growth and positive momentum in economy were demand side triggers, limited available slots in key airports provide supply side construct for an uptick in domestic airfares.
The brokerage has tracked domestic fares across 14 routes among 6 metros in the country and recorded fares for the next day, next week and next month to catch the temporal distribution of the fares.
As per its findings from July-end to mid-August, fares have actually increased 13.5 per cent on average for the fares next day, while the fares have declined by 6 per cent and 5 per cent on average for fares on next week and next month respectively.
22/08/16 PTI/Business Standard
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"We believe the sequential decline in domestic fares in the second quarter (July-September) 2016-17 will be significantly lower than the usual 15 per cent which we have seen in the past," the brokerage firm said.
According to the report, airfares in domestic circuit "has been unusually stronger than expected with a recovery seen during July/August" and "the decline in airfare is likely be much lower for July-September quarter 2016-17".
ICICI Securities noted that while the strong traffic growth and positive momentum in economy were demand side triggers, limited available slots in key airports provide supply side construct for an uptick in domestic airfares.
The brokerage has tracked domestic fares across 14 routes among 6 metros in the country and recorded fares for the next day, next week and next month to catch the temporal distribution of the fares.
As per its findings from July-end to mid-August, fares have actually increased 13.5 per cent on average for the fares next day, while the fares have declined by 6 per cent and 5 per cent on average for fares on next week and next month respectively.
22/08/16 PTI/Business Standard
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