Tuesday, September 07, 2021

Air travellers in pre-COVID mode as pandemic fears ebb; industry seeks end of govt curbs

Increasing vaccination and declining COVID-19 cases in most parts of India have given travellers the confidence to book air tickets weeks in advance instead of flying at short notice because of lockdowns or emergencies.

Industry experts and airline executives say that in view of the changed customer behaviour, the government should ease the restriction on capacity utilization and fares, which was imposed to help the smaller carriers withstand the disruption caused by the pandemic.

Airlines are allowed to sell seats up to 72.5 percent of their capacity of a schedule during a season and the minimum and maximum fares for the shortest flights, Class A, have been set at Rs 2,900 and Rs 8,800, respectively.

Online travel agency Ixigo’s group chief executive officer and co-founder Aloke Bajpai told Moneycontrol last week that as people are getting vaccinated and COVID-19 cases are declining, the advanced purchase window has again started increasing.

"So people are generally now comfortable booking, you know, a few weeks or maybe even a month in advance. This is being accelerated by the way the government’s caps on airline tickets are working right now," Bajpai had said.

Industry experts, airlines, and other online travel agents (OTA) companies agree.

An official from Yatra.com told Moneycontrol that in the past month nearly 55 percent of air tickets booked from the website were for travel 30 days in advance.

Airlines and OTAs offering customers a complete refund on advance bookings and options to reschedule flights is also helping passengers comfortably book flights in advance.

The rise in pre-booking of flights for the latter part of the year gives airlines the opportunity to offer prices at a rate lower than the government's prescribed lower cap.

“While price caps are helping some Indian airlines with weaker financial books since capacity utilisation is still capped and there isn’t a lot of demand across the country, higher floor prices are further causing a hesitancy to travel," Lokesh Sharma, a senior aviation and defence consultant, said.

Airlines are also looking to capitalise on the opportunity and are offering customers cheaper tickets beyond the government's deadline and increasing their passenger load factors for flights that are seeing lots of traction, multiple industry experts told Moneycontrol.

06/09/21 Yaruqhllah Khan/Moneycontrol.com

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