Logistics

Airfares zoom as flights cease to operate from tonight

Forum Gandhi Mumbai | Updated on March 24, 2020 Published on March 24, 2020

Ahead of suspension of domestic flights in India to curtail the spread of the coronavirus infection, the airfares have increased by up to 30 per cent per cent, revealed a two-week data by travel website, Ixigo.

Airfares for a one-way Chennai-Mumbai flight were affected the most.

The total cases of coronavirus have crossed over three lakh globally, and in India, the number of positive cases have reached 415.

On Monday, the Ministry of Civil Aviation ordered the suspension of domestic flights till March 31 and on Sunday, the Ministry of Railways suspended all passenger trains across India. To top this, several States have also sealed their borders to prevent the spread of the coronavirus.

In this situation, several people have rushed to railway stations and airports to go back to their home towns. According to reports, on Monday, over 70,000 people were at an outstation train station in Mumbai trying to go back to their villages or home towns. A similar situation could be witnessed at airports in India.

Prices surge

Since airfares are not regulated, the airfares have jumped between March 4 and 24. The Chennai-Mumbai route had recorded an average flight ticket on March 4 at ₹4,185, and on March 24, the flight average airfare is ₹5,430. This is 29.7 per cent higher.

A similar trend could be noticed for the Kolkata-Pune route, which saw a rise of 13 per cent between the said dates at ₹6,365 and ₹7,171 respectively. The Mumbai-Delhi route saw a 7.6 per cent rise, whereas the Delhi-Mumbai route saw a 6 per cent rise.

Interestingly, airfares for the Mumbai-Hyderabad route dropped by 12 per cent, and the Kolkata-Chennai airfares plummeted by 6.3 per cent.

Huge losses for sector

“The challenge is dissuading people from travelling, even if the airlines want to do something about it, they won’t be able to do anything for it because they are struggling too,” said Mark D Martin, Founder & CEO, Martin Consulting.

On the flip side, according to the Centre for Asia-Pacific Aviation (CAPA) India, in February, some carriers experienced a 5-10 per cent year-on-year decline in yields, although others were able to maintain similar levels to last year.

However, during the first fortnight of March, “the yield decline has accelerated across the board to around 12-15 per cent,” and as per CAPA estimates forward bookings are down over 30 per cent relative to last year.

According to the aviation industry body, could lead to airlines grounding at least 150 aircraft by April.

As of last week, Vistara, GoAir, Spicejet, Air India and IndiGo had suspended their international operation and rescheduled their domestic operations to optimise their costs. Indigo had already warned of a weak quarter ahead, with a decline of up to 15 per cent in daily bookings a fortnight ago. GoAir and IndiGo had also warned against employee lay-off.

Indian aviation industry, excluding Air India, will incur losses worth $500-600 million in the Q4 of FY20 because of the coronavirus pandemic, said CAPA India. CAPA had also warned that if the government did not intervene, several Indian airlines will shut down operations by May or June due to a lack of cash.

With the domestic and international operations completely shut from March 24, the situations for the Indian aviation industry may get worse.

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Published on March 24, 2020
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