Why Flight Prices Are So High Now in India
India’s aviation industry has witnessed some transformational changes in the past few years. As a result, air travel has become more accessible and affordable for the average Indian. However, the onset of the global pandemic has changed that, and flight prices in India are now soaring. In this blog post, we will explore the reasons behind the high flight prices in India.
The Impact of the COVID-19 Pandemic
The COVID-19 pandemic has had a significant impact on the aviation sector worldwide. In India, the pandemic led to the grounding of all domestic and international flights in the country for over two months. The flight operations resumed in May 2020 but with some limitations and restrictions to ensure passenger and crew safety.As a result of the pandemic, airlines have introduced a new set of standard operating procedures (SOPs), which include various measures such as compulsory use of PPE kits by the crew, mandatory temperature checks, social distancing, disinfection of aircraft, and many others. These measures have increased the operational costs of airlines, and they are now passing on these costs to the passengers in the form of higher ticket prices.
The Impact of the Fuel Prices
The price of aviation turbine fuel (ATF) has a significant impact on flight prices in India. ATF prices have gone up significantly in India due to the global rise in crude oil prices. In addition, the Indian government recently increased the excise duty on ATF by six percent, adding to the fuel’s cost.Since ATF is a significant operational cost for airlines, the rising fuel prices have considerably impacted India’s aviation industry. In response, airlines have been forced to increase ticket prices to maintain their profitability.
The Impact of the Rupee Exchange Rate
The exchange rate between the Indian Rupee and other currencies, especially the US Dollar, has a significant impact on the aviation industry. The airfare for international flights is denominated in foreign currencies, such as US Dollars, Euros, and British Pounds. Therefore, a weaker rupee leads to higher airfares.The Indian Rupee’s depreciation against the US Dollar and other foreign currencies in recent months has resulted in higher airfares. This depreciation has also increased the operational costs of airlines, as they have to pay a higher amount in foreign currency for aircraft lease rentals, maintenance, and spare parts.
The Impact of the High Demand for Domestic Travel
Due to the pandemic’s restrictions on international travel, the demand for domestic travel in India has increased significantly. Many airlines are operating their flights at full capacity, as they cater to increased demand. As a result, airlines can afford to increase fares as they have more passengers willing to pay the higher prices.
The Impact of the Capacity Limitations
The resumption of flight operations in India after the pandemic-induced lockdown saw the government imposing capacity limitations on airlines to observe social distancing rules. At first, airlines were only allowed to operate at 33 percent capacity. However, this percentage has since been increased to 80 percent.The capacity limitations mean that the airlines cannot generate revenue from all their seats, resulting in an increase in ticket prices. The airlines have to make up for the lost income by increasing revenue from other seats, which ultimately leads to higher fares.
The Bottom Line
Several factors are contributing to the high flight prices in India. COVID-19 is the most significant contributor, as the pandemic continues to increase operational costs for airlines in terms of standard operating procedures. In addition, higher fuel prices, a weaker rupee exchange rate, high domestic travel demand, and capacity limitations have led to increased airfares.As a consumer, it is essential to monitor the airfares and book early to take advantage of discounted prices. You should also compare prices across airlines to get the best deal. Despite the high airfares, air travel remains the most convenient and fastest means of transport in the country.