Capacity expansion constraints at India's two largest private airlines -- IndiGo and SpiceJet -- is set to impact the aviation sector's demand-supply dynamics in 2020.
But the squeeze in supply may not necessarily mean that fares will go up.
"In a normal year, the pressure in capacity creation, accompanied by increasing demand, would have led to higher fares. But given the current economic slowdown, much depends on the purchasing power of the customer," said Ajay Prakash, CEO at Mumbai-based Nomad Travels, adding that at present, discretionary spends, including travel, is being cut.
Another senior executive from a travel company pointed out that fares in domestic sectors for the present winter season are already lower than last year's levels. "Only an improvement in economic conditions can spur demand. It's very possible that fares may not move up much in 2020 despite the expansion issues with IndiGo and SpiceJet," the executive added.
18/12/19 Prince Mathews Thomas/Moneycontrol
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But the squeeze in supply may not necessarily mean that fares will go up.
"In a normal year, the pressure in capacity creation, accompanied by increasing demand, would have led to higher fares. But given the current economic slowdown, much depends on the purchasing power of the customer," said Ajay Prakash, CEO at Mumbai-based Nomad Travels, adding that at present, discretionary spends, including travel, is being cut.
Another senior executive from a travel company pointed out that fares in domestic sectors for the present winter season are already lower than last year's levels. "Only an improvement in economic conditions can spur demand. It's very possible that fares may not move up much in 2020 despite the expansion issues with IndiGo and SpiceJet," the executive added.
18/12/19 Prince Mathews Thomas/Moneycontrol
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