Despite soaring costs primarily due to the rupee depreciation, Indian carriers are selling tickets at the lowest price levels in the past two years.
Airlines also fear that due to low demand, they won't be able to raise fares by any significant amount, even when the festive season starts in October. "Fares are at least 25% cheaper whichever way you compare it...month-on-month or year-onyear," a senior executive at India's top budget airline told ET.
Fares are at a record low, even for the current lean season, he added. "This comes at a time when costs are 25% higher. But there is no other way for us, given the demand. Also, full-service carriers aren't maintaining any fare difference with us, so that's worse," he says.
"Fares are low all the way up to January, even on festival dates of Diwali and Christmas, which is rare," says Debashish Sinha, vicepresident for airline contracting at Makemytrip.com, India's biggest travel portal by sales.
"Till April, airlines had hiked fares radically. We had seen fares as high as Rs 12,000-15,000 for Delhi-Mumbai. They suddenly found their forward bookings empty. Hence the cut in fares" he adds.
But there is no way the airlines can pass on the costs to consumers as demand for local travel has been sapped, thanks to an overall slowdown in the economy and little growth in income levels.
(You need to login first to read complete news). New User? Register for FREE!
» Back to Travel News