Mumbai: Indian carriers are selling tickets cheap even with the start of the festive season, the only time they can increase fares, an indication that airline companies may find it tough to make up for the throwaway fares they have been offering all year round.
"It is true that airlines are taking longer this year to hike fares, though that will happen in a few weeks," said Rajji Rai, chairman of Swift Group, a travel company. "To that extent, demand is definitely lower," he added.
The average 60-day fare in sectors such as Delhi-Mumbai, Mumbai-Bangalore and Mumbai-Goa is about Rs 3,200, about 20% lower than last year, according to Samyukth Sridharan, chief operating officer at travel portal Cleartrip.
On popular international sectors such as Delhi-Dubai and Mumbai-Hong Kong, the two-month advance fare is Rs 10,500, about 10% lower than the same period last year, said Sridharan.
The primary reason for this is oversupply, said experts. "The gap between demand and supply has increased more than ever. There are some airlines such as Jet which are curtailing loss-making flights but most others are still adding capacity," said a senior airline executive who didn't want to be identified.
This will worsen as AirAsia India, which started flying earlier this year, expands its network and other airlines such as the Tata Sons-Singapore Airlines venture Vistara begin operations, the executive said.
There are other reasons, too. Airline executives say the price war that should have stopped by September is still on.
11/09/14 Anirban Chowdhury/Times of India
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"It is true that airlines are taking longer this year to hike fares, though that will happen in a few weeks," said Rajji Rai, chairman of Swift Group, a travel company. "To that extent, demand is definitely lower," he added.
The average 60-day fare in sectors such as Delhi-Mumbai, Mumbai-Bangalore and Mumbai-Goa is about Rs 3,200, about 20% lower than last year, according to Samyukth Sridharan, chief operating officer at travel portal Cleartrip.
On popular international sectors such as Delhi-Dubai and Mumbai-Hong Kong, the two-month advance fare is Rs 10,500, about 10% lower than the same period last year, said Sridharan.
The primary reason for this is oversupply, said experts. "The gap between demand and supply has increased more than ever. There are some airlines such as Jet which are curtailing loss-making flights but most others are still adding capacity," said a senior airline executive who didn't want to be identified.
This will worsen as AirAsia India, which started flying earlier this year, expands its network and other airlines such as the Tata Sons-Singapore Airlines venture Vistara begin operations, the executive said.
There are other reasons, too. Airline executives say the price war that should have stopped by September is still on.
11/09/14 Anirban Chowdhury/Times of India
