Summer vacation heats up demand for air travel

Airlines and tour operators are set to make the most of the surge in demand for travel during summer period as agencies report a 25-30% jump in airfares in the April to June quarter.

Summer vacation heats up demand for air travel
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Airlines and tour operators are set to make the most of the surge in demand for travel during summer period as agencies report a 25-30% jump in airfares in the April to June quarter.

Indiver Rastogi, President & Group Head, Global Business Travel, Thomas Cook (India) and SOTC Travel said, “We are witnessing brisk demand of over 3x for the summer season compared to last year.”

Airfares for popular routes from hubs like Mumbai, Delhi and Bengaluru to Chandigarh, Srinagar, Dehradun, Kochi, Goa and Port Blair – have witnessed a 10-50% surge compared to the January to March quarter and 20-60% surge compared the summer season of last year, as per Thomas Cook (India).

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Aloke Bajpai, Group CEO and Co-founder, ixigo said, “Airfares are higher than pre-Covid-19 levels with domestic fares rising 25-30% and international fares on some routes going as high as 60-70%. But this has not deterred the overall travel sentiment.”

Round-trip airfares from India to cities like Rome and Paris which were around ₹50,000-60,000 last year have surged to ₹80,000-90,000 for a round-trip journey. Middle East routes like New Delhi-Dubai and Bengaluru-Dubai have jumped by 40-50% to ₹35,000-40,000 this year, according to ixigo.

Besides the outbound leisure traffic, the other reason behind the increase in international airfares is the demand created by the inbound migrant working population travelling home after a gap of around a year.

Easy visa regimes for most South East Asian countries such as Singapore, Malaysia, Thailand and Indonesia, Maldives, Mauritius, Dubai, Abu Dhabi and Ras Al-Khaimah are reporting the demand surge. For the domestic sector, demand trends indicate an uptick for destinations like Kashmir, Himachal, Uttarakhand, Leh Ladakh, North East, Kerala, Goa and Andamans.

There is also a rise in spontaneous and flexible travel. Pre-pandemic travelers used to book their summer trips a couple of months in advance but now they are booking a month and even a few weeks in advance, ixigo added.

In line with the surge in demand, last month, the Directorate General of Civil Aviation (DGCA), approved 22,907 flights per week in the seven-month summer schedule, which began from March 26. However, this is an increase of just 4.4% compared to the winter schedule when the industry was allowed to operate 21,941 departures every week.

In March alone, the number of passengers carried by domestic airlines jumped 21% to 12.89 million compared to 10.61 million reported in the same month last year. This translates to a daily average of nearly 416,000.

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India’s top six airlines which control 95% of the domestic market, reported nearly 90% occupancy (passenger load factor) of seats during March.

Stakeholders say that with no reason for demand to lose momentum in the upcoming months, the additional number of flights allowed by the DGCA, will not be enough to meet demand resulting in continued rise in airfares.

“Given the high demand for the peak season of summer vacation and supply constraints, airfares are unlikely to see any reduction,” Rastogi added.