Tuesday, December 25, 2018

Fliers, rejoice! 2019 may bring more destinations, cheaper fares

Stiff competition in the skies meant airlines in India were unable to raise airfares for the most part of 2018, and it appears that things are unlikely to change in the coming year as well, as airlines continue to push their capacity expansion to new limits. 2019 will also be the year when low cost carriers (LCCs) will commence flights to long-haul destinations, challenging the incumbent full service carriers (FCCs), and thereby leading to a reduction in international fares.

Also, falling fuel prices may act as the catalyst in this development, as the carriers, after having bled heavily, find some breather to continue the fight, analysts claim.

The development comes even as India, among the fastest growing aviation markets in the world, posted its 50th consecutive month of double-digit growth (15.0 per cent) in November. While this was a step down from the 19.6 per cent posted in September, the strong upward trend in traffic remains in place, supported by structural changes, including ongoing rise in living standards as well as large increases in the number of airport connections within the country, claims the latest report released by airline lobby group International Air Transport Association (IATA).
Talking about the low fares, John Nair, head (business travel) at Cox & Kings Ltd, said it was a rewarding year for fliers as airfares remained stable despite crude oil prices rising. "Domestic airfares will remain depressed as carriers are dumping capacity," said Nair, adding that LCCs running more international routes, especially long-haul ones, would mean affordable airfares to foreign destinations.
25/12/18 Shahkar Abidi/DNA
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