Delhi runway closure, seasonal demand push up air fares

New Delhi: Temporary closure of one of the runways at the Indira Gandhi International Airport in New Delhi together with seasonal demand have led to a surge in spot air fares to and from Delhi.

Delhi runway closure, seasonal demand push up air fares

On Monday morning, travel portals showed that spot prices for a non-stop Delhi-Bangalore flight ticket in full-service carriers were in the range of Rs 35,000-38,000. For flights with one stop, the starting price was over Rs 15,000. The average one-way air fare in the route in February was around Rs 6,500, which steadily inched up to a peak of Rs 9,000 in October, according to an aviation sector analyst. The runway closure till 23 November is believed to have resulted in cancellation of nearly 100 flights a day at the Delhi airport.

An official of the GMR group that operates the Delhi airport said airlines were given a notice of two-three months about the maintenance-related runway closure. “Seasonal demand and jet fuel price are also reasons for any increase in air fare. No airline can complain that the runway closure took them by surprise,” said the official, who spoke on condition of anonymity.

Industry observers said an increase in air fares during instances like runway closure that lead to flight cancellations was usually the result of airlines trying to protect their existing customers. “During events leading to flight cancellations, airlines will prefer to make alternate travel arrangements for existing customers in cancelled flights rather than accepting new passengers with a low fare,” said Samyukh Sridharan, president and chief operating officer of Cleartrip.com, an online air ticketing firm.

A senior executive from the airline industry, who spoke on condition of anonymity, said the surge in pricing was automatic on account of demand and that it was not the result of an intentional pricing strategy related to any specific event.

“Airlines keep prices low for tickets booked in advance because of intense competition. Because of the low prices on these tickets, airlines are not in a position to make full refund on cancellations. During the season, if there are any disruption in service, fares will be high depending on demand, especially at the last minute,” said the executive with one of the full-service carriers. The executive also said the surge in fare was based on actual demand on the ground. “We do not decide to increase the fare if a cyclone is predicted. What if the cyclone doesn’t materialise?” said the official.

Air travel in India has seen a boom in recent years with a massive increase in airline capacity and competitive pricing. Policy makers have plans to boost the volume of air travel four-fold to 1 billion trips a year in the next 1-1.5 years.

source: livemint


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