flight tickets: Book that flight! Airfares likely to fall by up to 40%

Airfares are likely to fall up to 40% on an expected increase in the number of flights, following the government’s go-ahead for resumption of regular international air travel from March 27, said industry executives. Global travel opens up after two years of Covid-induced restrictions.

Lufthansa and group carrier Swiss plan to almost double flights in the next few months, while Singapore Airlines may increase flights by 17%, said executives at these airlines. Domestic carrier IndiGo hopes to resume nearly 100 global flights in the coming months.

Currently, airlines can operate a limited number of overseas flights under bubble arrangements with certain countries, as India has clamped a ban on regular international flights. Limited capacity has pushed airfares up to 100% higher, compared to before the pandemic, on some routes such as India-US.

“Suspension of regular international flights had created a demand-supply imbalance, making international travel expensive for certain routes under the bubble agreements,” said Aloke Bajpai, group chief executive of travel portal Ixigo. “With capacity coming back and with an increase in connectivity and more routes, we can expect international fares returning to pre-Covid levels.”

The expected fall in international airfares is also likely to help cushion the fresh rise in aviation turbine fuel (ATF) prices amid the surge in crude oil prices following Russia’s military operations in Ukraine. ATF prices have been increased five times this year, on top of a 100% increase last year.

“Had bubble flights continued, with US carriers cutting flights including to India, prices would have soared further than their current high levels,” said Rajesh Magow, group chief executive, Makemytrip. “However, with the decision to allow regular international flights and a resultant increase in capacity, prices will stabilise.”

Makemytrip’s Magow, however, cautioned, “Prices will increase again if fuel prices continue their upward trajectory and there is no resolution to the crisis in the West.”

Bajpai of Ixigo said that while international leisure travel is seeing strong pent-up demand, business travel will take some more time to get back to pre-pandemic levels. “Corporate travel, overall, has taken a big hit during the pandemic, especially with the shift towards remote work. Airlines will feel some impact due to slower recovery of business and leisure trips,” he said.

Gaurav Bhatnagar, co-founder of TBO Tek, however, said prices may remain unchanged as high demand in the leisure segment and rising fuel prices would offset the augmentation of capacity.

Most airlines welcomed the government’s move to increase flights.

“We are optimistic that this move, coupled with the expansion of Singapore’s Vaccinated Travel Lanes across India, will offer better and more convenient options for Indian customers, for whom Singapore is a key destination and transit hub for international travel,” said Sy Yen Chen, general manager India at Singapore Airlines.

“In anticipation of the increased demand for air travel, we are not only progressively increasing our frequency from across India but will also be resuming our A380 services from Mumbai this month, and from Delhi in the near future,” said Chen, referring to Airbus’ jumbo jet.

Singapore Airlines currently operates 52 weekly flights from eight cities across India. From March 21, it plans to progressively ramp up to 61 weekly flights, with increased frequencies from Ahmedabad, Chennai, Delhi, Kochi and Mumbai.

Scoot, the airline’s low-cost subsidiary, operates 22 times weekly from five cities in India.

Lufthansa and Swiss, which have 22 weekly flights now, will increase the count to 42 by October this year, said a spokesperson.

A senior executive at Vistara said the airline is exploring all options on augmenting international flights.