Why Flight Prices are So High Now in India: An Analysis
Travelling by air in India has become an important mode of transportation over the years. However, with soaring prices of flight tickets, people are finding it increasingly difficult to plan for domestic or international travels. A lot of people believe that flight prices have gone up due to the COVID-19 pandemic. While this is true to some extent, there are several other factors that contribute to the high prices of flights in India. In this blog post, we will be discussing these factors in detail.
The Impact of COVID-19
The COVID-19 pandemic has affected the aviation industry worldwide. India has also witnessed a significant impact on its aviation industry, with airlines incurring huge losses due to the travel restrictions and decreased demand for flights. Due to the pandemic, airlines are forced to resort to social distancing measures which means that they can operate flights with a lesser number of passengers. The costs of running flights remain the same, but the revenue generated by selling tickets decreases drastically. To account for this revenue loss, airlines have no option but to hike ticket prices.
Increased Fuel Prices
The cost of fuel contributes greatly to the operational costs of any airline. The fluctuations in fuel prices directly affect the pricing of flight tickets. In the past few months, fuel prices have been rising continuously, and this has resulted in increased prices of flight tickets. Fuel prices in India are determined by international prices, and the recent surge in crude oil prices in the international market has also led to a hike in the prices of aviation fuel. This has, in turn, pushed airline companies to raise the prices of their tickets to break even.
High Maintenance Costs
Airlines in India are required to maintain their aircraft in top condition to ensure safe and smooth operations. Maintaining and repairing aircraft is costly, and airline companies have to spend a significant amount of money to keep their planes in good shape. This cost gets passed on to the passengers in the form of higher ticket prices. Additionally, due to the pandemic, airlines have to undertake special cleaning and sanitization measures after every flight, which further adds to the maintenance costs.
GST and Other Taxes
The Goods and Services Tax (GST) has also played a significant role in the increase of flight prices in India. Under the current GST rules, tickets for economy class are taxed at 5%, while tickets for business and first class are taxed at a higher rate of 12%. The exact amount of tax on the ticket fares will vary depending on the destination, airline, and class of travel. Additionally, there are several other taxes and surcharges that airlines must pay such as passenger service fee, user development fee, and congestion fee.
Dynamic pricing is when airlines adjust their fares based on various factors such as demand, competition, and seasonality. Airlines use sophisticated algorithms to optimize their pricing strategy and maximize their revenue. This means that prices can fluctuate rapidly, making it difficult for consumers to plan their travels. If someone is booking tickets for travel during peak season, they may have to pay a higher price than someone who is flying during the off-season.
The high prices of flights in India can be attributed to various factors such as the impact of the COVID-19 pandemic, increased fuel prices, high maintenance costs, GST and other taxes, as well as dynamic pricing. While some of these factors are beyond the control of airlines, others are caused by external factors that affect the aviation industry as a whole. With the situation changing rapidly, it is difficult to predict when flight prices will stabilize. However, with proper planning and research, consumers can still find ways to save money while booking their flights.
This brings us to the end of our analysis. We hope that you found this article informative and helpful. Do let us know your thoughts and comments below!