More seats, early bird offers by airlines and regulator’s scrutiny on pricing have led to dip in air fares.

Travellers are in for a treat this Diwali. Airline fares for the Diwali week have slid by 25-30 per cent as compared to the Diwali week last year. Travel agents attribute the reduction in prices to the availability of more seats, earlier promotional offers by airlines and the regulator’s surveillance of flight pricing.

Sanjay Bhasin, Chief Executive Officer of Goibibo.com, told Business Line: “Starting fares for a Mumbai-Delhi flight in the Diwali week last year were around Rs 16,000 to Rs 17,000. This year, we have several airlines with starting airfares of around Rs 10,000, as the number of flights has increased.”

Indigo, SpiceJet and Air India have tickets retailing around Rs 10,000-11,000 during the Diwali week this year.

Regi Philip, who runs Mumbai-based travel agency Cosmos Agencies, said airfares for the Diwali week have come down by 50 per cent in some cases, as compared to last year, for certain sectors. He attributes it to the early bird rate schemes that several airlines had unveiled earlier this year.

Noel Swain, Executive Vice President-Supplier Relations of Cleartrip said. “At an overall level, fares are three per cent lower for travel during the Diwali period. This includes the spike in advance booking as airlines were dishing out low fares in August and the first fortnight of September.”

In August, Jet Airways had airfares starting from Rs 1,777 available on seven lakh bookings that were made between August 3 and 9, for journeys beginning on or after August 10. The Diwali week was not included in the ‘blackout period’ by Jet. Other airlines too came up with offers to woo passengers.

“This Diwali, fares have not gone up that dramatically because sentiment is not all that great. Even the numbers of air bookings are slightly less, but in the last few days we are seeing a pickup,” said Sharat Dhall, President. Yatra.com.

Added Cleartrip’s Swain, “The quantum of bookings made in the one week prior to Diwali have come down by 10 per cent year-on-year while ‘pricing (of flights) is up by seven per cent’’’.

Amber Dubey, Partner and Head-Aerospace and Defence at KPMG India, said the dip in peak Diwali airfares would bring a lot of goodwill.

“I think this is a mature action by our airlines. A few tickets sold at excessive prices may fetch a few extra crores, but also creates adverse publicity for the airlines. That affects the ability of the Government to provide much needed fiscal and monetary support to the ailing sector,” he added.

What has also underscored the increase in seat availability is a note by the Directorate General of Civil Aviation (DGCA), which has said that domestic airlines would operate 11,886 weekly flights during the 2013 winter schedule, a nine per cent increase over last year.

Analysts said that Indigo Airlines would be leading the pack with increased frequency of flights across the country.

Pricing has been a major issue with airlines competing with each other. Earlier this year, the Supreme Court asked DGCA to examine the wide range of base prices of air tickets.

adith.charlie@thehindu.co.in

(This article was published on October 30, 2013)
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