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Friday, 29 November, 2019, 12 : 30 PM [IST]

Turbulence for airlines continue as fares plunge

According to a report by Rhik Kundu in The HT, airfares on India’s most popular routes have nosedived over the past month when demand is usually the strongest during a year in a worrying sign that one of the roughest stretches for the domestic aviation industry may not witness a quick turnaround, said industry executives. Average ticket prices between October 25-November 25 for bookings made within a two-week window on several routes are 25% to 35% lower compared to the year ago period, according to data from online travel company Cleartrip. Traditionally, bookings made in a two-week span prior to a flight command the highest rates. After suffering heavy losses in the September quarter, airlines were pinning their hopes on the busy October- December quarter to turn back into profit. 

But industry officials now said their fortunes are unlikely to change soon. “The month of October has been a disaster as far as demand is concerned, while November has been marginally better,” said a New Delhi-based senior executive of a budget airline. “The immediate future in terms of demand looks bleak.” Two of India’s largest airlines, IndiGo and SpiceJet have reported huge losses in the September quarter. While SpiceJet’s losses rose by a fifth year-on-year to INR 461.22 crore in the quarter, IndiGo, run by InterGlobe Aviation Ltd, plunged to a record quarterly loss of INR 1,062 crore in the same period. 

One-way average airfares between New Delhi and Mumbai, one of the country’s busiest sectors, have fallen by about 30% annually to INR 6,063 in the October 25- November 25 period, while one-way average airfares between New Delhi-Chennai and Hyderabad-New Delhi have fallen 35% and 38%, respectively, to INR 5,287 and INR 4,282. During the same period, one-way average airfare between Mumbai and Kolkata has fallen 33% to INR 5,650, while fares between Bengaluru and Mumbai have dropped 29% to INR 4,250. Airfares to prominent holiday destinations like Leh and Goa also fell 27% and 6% during the above mentioned period.
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