A combination of rising air travel demand, flight cancellations by SpiceJet, Delhi fog and supply constraints have sent spot fares soaring through the roof this festive season.
A quick survey by dna shows fares have risen almost 15% on an average, and by more than 50% on major sectors this month, compared with the same month last year.
While it is par for the course for fares to shoot up in December every year, this time, it is exceptionally high because of the current market situation.
Anoop Kanuga, director of Mumbai-based Bathija Travels, said there was a situation of demand outstripping supply because of last- minute cancellations of SpiceJet flights and Delhi fog.
Why is this sudden jump in fares?
According to Kanuga, demand has risen by over 10% and overall fares are higher by more than 20% this December (compared with last year). "India's image has improved because of Modi and its improving economy. This has seen a sharp jump in in-bound foreign travellers," he says.
Which sectors are the most expensive?
Major sectors like Delhi, Kolkata, Mumbai, Kochi and Bengaluru have seen the highest jump. Spot fares for the top three routes – Delhi-Mumbai, Delhi-Bengaluru and Mumbai-Bengaluru – are also up significantly. "Spot fares in June this year were tracking (the same as) December 2013 levels, hence the increase in both full-year and six-month fares is nearly similar," said an executive with travel portal MakeMyTrip.
What about southern sectors?
"Fares on most southern sectors have been hit drastically as SpiceJet had a stronghold there (before it cancelled most of its flights on that sector)," said a Mumbai-based travel agent. "Fares to Kochi, Thiruvananthapuram, Madurai are skyrocketing. I have sold tickets to Kochi (from Mumbai) for Rs 30,000 per person. People are ready to pay but there are no seats available," a Mumbai-based travel agent said.
What's this SpiceJet effect?
SpiceJet has been forced to cancel more than 50 flights daily due to its financial crisis that has led to several of its planes being returned to lessors. Even though the airline's operations may be limping back to normal, it has still not restarted cancelled flights and fares on the domestic sector remain high.
So, are cancellations also going up?
No. December being a peak month, lots of hotels take full payments in advance. Hence, despite expensive fares, many are going ahead with their plans, according to Jai Bhatia, chairman, western region, Travel Agents Association of India. As a result, most people end up paying exorbitant fares.
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