Domestic airfares on key routes in India have surged by up to 40% over the last six quarters due to increasing passenger traffic and limited capacity.
Despite this rise, experts highlight that India’s domestic air ticket prices are still among the lowest in the world.
Growing Air Travel Market
India is one of the fastest-growing civil aviation markets globally, with an average of 450,000 passengers flying domestically every day.
Although only a small percentage of the population travels by air, capacity constraints pose a significant challenge. Many aircraft are grounded, primarily due to supply chain issues.
Average Fares and Capacity Challenges
According to aviation consultancy firm CAPA India, average fares on the top 20 domestic routes,
such as Mumbai-Delhi, Bengaluru-Delhi, Bengaluru-Mumbai, and Delhi-Hyderabad, have risen by nearly 40% over the past six quarters.
CAPA India attributes this trend to around 150 aircraft being grounded due to supply chain and other issues.
The firm predicts that structurally high pricing will persist until FY 2025-26.
Lowest Average Fares in the World
Sanjay Kumar, Chairman and CEO of InterGlobe Technology Quotient Ltd, noted that fares have increased in the last three years, especially after the Covid-19 pandemic.
Despite this, India’s average airfare remains one of the lowest globally.
For instance, the average airfare between Delhi and Mumbai is around Rs 5,000 to Rs 6,000.
While this may seem like a significant percentage increase, the actual amount is modest considering overall inflation.
CAPA India stated that the average fare of Rs 4,989 in FY 2003-04, when adjusted for inflation, rose to around Rs 11,000 in FY 2019-20.
