The steep drop in the price of aviation turbine fuel (ATF) and an increase in capacity have driven down airfares in most parts of the country to two-year lows. Data sourced from MakeMyTrip show fares on the Delhi-Bengaluru route have fallen by 27% from 2015 levels and 32% from prices charged in 2014; these fares are for the April to June period. On the Delhi-Hyderabad route, fares have dropped by 20% over levels seen in 2015 and 35% over those in 2014.
On the Delhi-Chennai route, fares have come off by about 19% from levels seen in 2015 and 30% from those charged in 2014. The only exception is Mumbai — ticket prices to the country’s financial capital remain elevated and have increased marginally due to an increase in airport charges, higher occupancies on outgoing flights and the lack of slots at Mumbai airport.
ATF prices, which constitute 40-50% of the total operating costs of an airline, have stayed subdued all through the last year. Jet fuel prices have decreased by 57% since July 2014 and airlines in unison have decided to pass on the savings to customers. “Since October last year fuel prices have decreased significantly, so prices have to come down for most routes.
This summer while demand is high, there’s more capacity partly because aircraft are being better utilised and fleet sizes have been increased,” a senior executive at an airline told FE. All airlines look forward to the summer holiday season since they can improve the passenger load factor and earn more revenues.
Gurgaon-based low-cost airline SpiceJet has added three new sectors — Mumbai to Udaipur, Tirupati to Vijayawada and Vijayawada to Visakhapatnam — as a part of its summer schedule. The airline will also increase flights in sectors like Chennai to Hyderabad, Delhi to Srinagar and Dharamshala and Hyderabad to Bengaluru.
“Fares were expected to be low this year as prices of crude oil have fallen significantly. However, while on average ticket prices have been on the lower side, airlines have not waged a fare war this summer, which shows they are maturing,” said Amit Pandurangi, partner, Deloitte.
National carrier Air India as part of its summer schedule will offer daily return flights from Bengaluru to Thiruvananthapuram and Mumbai to Bhopal. Frequency on the Delhi-Pune sector is also being enhanced. Passengers looking for more options to Punjab will also be able to avail the fourth frequency with return flights on the Delhi-Amritsar sector.
01/04/16 Malyaban Ghosh/The Financial Express
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On the Delhi-Chennai route, fares have come off by about 19% from levels seen in 2015 and 30% from those charged in 2014. The only exception is Mumbai — ticket prices to the country’s financial capital remain elevated and have increased marginally due to an increase in airport charges, higher occupancies on outgoing flights and the lack of slots at Mumbai airport.
ATF prices, which constitute 40-50% of the total operating costs of an airline, have stayed subdued all through the last year. Jet fuel prices have decreased by 57% since July 2014 and airlines in unison have decided to pass on the savings to customers. “Since October last year fuel prices have decreased significantly, so prices have to come down for most routes.
This summer while demand is high, there’s more capacity partly because aircraft are being better utilised and fleet sizes have been increased,” a senior executive at an airline told FE. All airlines look forward to the summer holiday season since they can improve the passenger load factor and earn more revenues.
Gurgaon-based low-cost airline SpiceJet has added three new sectors — Mumbai to Udaipur, Tirupati to Vijayawada and Vijayawada to Visakhapatnam — as a part of its summer schedule. The airline will also increase flights in sectors like Chennai to Hyderabad, Delhi to Srinagar and Dharamshala and Hyderabad to Bengaluru.
“Fares were expected to be low this year as prices of crude oil have fallen significantly. However, while on average ticket prices have been on the lower side, airlines have not waged a fare war this summer, which shows they are maturing,” said Amit Pandurangi, partner, Deloitte.
National carrier Air India as part of its summer schedule will offer daily return flights from Bengaluru to Thiruvananthapuram and Mumbai to Bhopal. Frequency on the Delhi-Pune sector is also being enhanced. Passengers looking for more options to Punjab will also be able to avail the fourth frequency with return flights on the Delhi-Amritsar sector.
01/04/16 Malyaban Ghosh/The Financial Express
