Airfares jump 20-25% amid Vistara woes, high travel demand

New Delhi: Travellers will have to shell out more for domestic flights this summer season, with airfares surging 20-25 per cent amid Vistara flight cancellations and strong air travel demand, according to industry experts.

At a time when peak summer travel period is round the corner, the airline industry is grappling with challenges in scaling up capacity to match demand and are even using larger aircraft on domestic routes.

Faced with pilot woes, Vistara has cut 25-30 flights daily or 10 per cent of its total capacity, a development that comes when the country's airline industry is already operating with reduced number of aircraft due to the bankruptcy of Go First and grounding of over 70 planes by IndiGo over engine issues.

An analysis by travel portal ixigo showed that spot fares on certain routes jumped up to 39 per cent during the April 1-7 period compared to March 1-7 period.

During the given period, the one way spot fares for Delhi-Bengaluru flights climbed 39 per cent, while it rose 30 per cent for Delhi-Srinagar flights.

The rise was 12 per cent for Delhi-Mumbai services and 8 per cent in case of Mumbai-Delhi services, as per the analysis.

Bharatt Malik, Senior VP - Air and Hotel Business at travel portal Yatra Online, said the anticipated average airfare surge in the current summer schedule, encompassing both domestic and international routes, is projected to range between 20-25 per cent.

"Vistara's decision to reduce flights by 10 per cent has affected ticket prices on major domestic routes. We've observed a significant surge in fares, with prices skyrocketing by approximately 20-25 per cent across key routes such as Delhi-Goa, Delhi-Kochi, Delhi-Jammu, and Delhi-Srinagar," Malik said.

He also said that one of the key reasons for the higher airfares is reduction in flight operations by Vistara and added that escalating fuel costs as well as a heightened demand for summer travel has further contributed to the increase.

Vistara is to operate more than 300 flights daily in the ongoing summer schedule that started on March 31.

"We are carefully scaling back our operations by around 25-30 flights per day, i.e. roughly 10 per cent of the capacity we were operating. This will take us back to the same level of flight operations as at the end of February 2024, and provide the much-needed resilience and buffer in the rosters," Vistara said in a statement on Sunday.

ixigo said spot fares have surged by 20-25 per cent on some routes due to rising demand before the peak summer travel season and some flight cancellations.

"However, this is a temporary disruption caused by last-minute flight cancellations and fares should stabilise in a few weeks as soon as flight schedules normalise," it said.

Jagannarayan Padmanabhan, Senior Director and Global Head, Transport, Mobility, and Logistics Consulting at CRISIL Market Intelligence and Analytics, said the impact of higher airfares on travellers is expected to be substantial.

"As we enter the busy season, we anticipate a 5-7 per cent increase in airfare, with pricing pressure particularly notable on trunk routes like Delhi-Mumbai and Mumbai-Bengaluru. Given that much of the upcoming travel will be for personal reasons and with family, the impact is expected to be substantial."

"Consequently, a considerable number of travellers might choose rail travel for shorter distances instead," he noted.

According to Malik, flights to popular domestic destinations like Ladakh, Manali and Goa have seen a 20 per cent uptick in prices, reflecting a surge in demand for both staycations and seasonal getaways.

Vistara has a fleet of 70 planes comprising 63 aircraft from A320 family and 7 wide-body Boeing 787s.

Further, the carrier has deployed larger aircraft like B787-9 Dreamliner and A321 neo on select domestic routes to combine flights or accommodate more customers.

In the ongoing summer schedule, Vistara will be operating 25.22 per cent more weekly flights at 2,324.

Indian airlines will operate a total of 24,275 weekly domestic flights during the summer schedule starting from March 31, a nearly 6 per cent increase compared to the year-ago period.

The number of weekly departures is just 2.30 per cent higher as against 23,732 flights being operated by the scheduled carriers in the winter schedule that ended on March 30, according to aviation regulator DGCA.

IndiGo, Air India and Vistara will operate more flights while SpiceJet will reduce departures during the 2024 summer schedule that spans from March 31 to October 26.