New Delhi: Industry bodies and travel companies said a steep rise in international airfares driven by the recent ATF price revisions and the uncertainty around the conflict in West Asia could lead to a dip in demand for summer travel.
Data shared by Ixigo showed average one way fares for April for Mumbai-Kuala Lumpur, New Delhi-Ho Chi Minh and Bengaluru-Singapore, Mumbai-Hanoi and Delhi-Kathmandu are up by 110%, 58%, 33% and 29% month-on-month, respectively. An ixigo spokesperson said international airfares have seen an uptick this April, partly driven by recent aviation turbine fuel price revisions, with some seasonal routes witnessing sharper increases.
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Kapil Jain, cofounder and chief executive of Fly Divine Travels said he has received multiple cancellations from travellers for destinations such as Vietnam and Azerbaijan. "A 4-5% increase doesn't matter, but if a Rs 30,000 ticket price jumps to Rs 45,000-50,000, people consider cutting back on travel," said Jain. "The fuel costs are high; the dollar rate is high.
The severe fuel crisis in markets such as Vietnam is also pushing package prices up because land costs go up. We are also getting cancellations for Azerbaijan and domestic destinations such as Munnar and Coorg for the summer as hoteliers are hiking prices after bookings. Our clients are telling us a five-star hotel in Goa couldn't serve dinner because of the LPG issue," he added.
Sunil Kumar, president of Travel Agents Association of India said the uncertainty around the conflict will dent demand for the summer. "European destinations are anyway affected, and there are reports of LPG supply constraints in India. People hold off on discretionary travel amid uncertainties," he added.
Also Read: Higher airfares due to any further cost escalation will hit demand: IndiGo amid Middle East conflict
Rajiv Mehra, general secretary of the Federation of Associations in Indian Tourism & Hospitality said the industry body estimates a 15-20% fall in demand for summer travel due to the hike in fares.
Despite Indian oil marketing companies absorbing the spike in fuel prices, airline officials warned that their cost of operations has risen significantly.
They said while ticket prices have gone up due to the fuel surcharge, it remains to be seen how long this will be sustainable.
"High ticket prices over a long period impacts demand. While as of now there is no impact on demand, whether it will impact the peak summer travel season will be clear in next few weeks," said an airline official.
On Monday, all airlines operated with an average occupancy of more than 90% on domestic routes.
Meanwhile, Air India on Tuesday hiked fuel surchages.
Data shared by Ixigo showed average one way fares for April for Mumbai-Kuala Lumpur, New Delhi-Ho Chi Minh and Bengaluru-Singapore, Mumbai-Hanoi and Delhi-Kathmandu are up by 110%, 58%, 33% and 29% month-on-month, respectively. An ixigo spokesperson said international airfares have seen an uptick this April, partly driven by recent aviation turbine fuel price revisions, with some seasonal routes witnessing sharper increases.
Also Read: Spring break hit: Indian students cut travel plans as airfares surge amid West Asia tensions
Kapil Jain, cofounder and chief executive of Fly Divine Travels said he has received multiple cancellations from travellers for destinations such as Vietnam and Azerbaijan. "A 4-5% increase doesn't matter, but if a Rs 30,000 ticket price jumps to Rs 45,000-50,000, people consider cutting back on travel," said Jain. "The fuel costs are high; the dollar rate is high.
The severe fuel crisis in markets such as Vietnam is also pushing package prices up because land costs go up. We are also getting cancellations for Azerbaijan and domestic destinations such as Munnar and Coorg for the summer as hoteliers are hiking prices after bookings. Our clients are telling us a five-star hotel in Goa couldn't serve dinner because of the LPG issue," he added.
Sunil Kumar, president of Travel Agents Association of India said the uncertainty around the conflict will dent demand for the summer. "European destinations are anyway affected, and there are reports of LPG supply constraints in India. People hold off on discretionary travel amid uncertainties," he added.
Also Read: Higher airfares due to any further cost escalation will hit demand: IndiGo amid Middle East conflict
Rajiv Mehra, general secretary of the Federation of Associations in Indian Tourism & Hospitality said the industry body estimates a 15-20% fall in demand for summer travel due to the hike in fares.
Despite Indian oil marketing companies absorbing the spike in fuel prices, airline officials warned that their cost of operations has risen significantly.
They said while ticket prices have gone up due to the fuel surcharge, it remains to be seen how long this will be sustainable.
"High ticket prices over a long period impacts demand. While as of now there is no impact on demand, whether it will impact the peak summer travel season will be clear in next few weeks," said an airline official.
On Monday, all airlines operated with an average occupancy of more than 90% on domestic routes.
Meanwhile, Air India on Tuesday hiked fuel surchages.
