Reasons why Domestic airfare is so expensive!

Domestic flights within India are insanely expensive now. Just 1 hour flight between Mumbai-Mangaluru or Mangaluru-Hyd etc cost 11-12k return while we can fly all the way to South East Asia, Middle East for that kind of money on international carriers during their sale.

Why India's domestic flight tickets are getting so expensive?

Reason 01: No competition! Right now Air India group (Air India, Air India Express) and Indigo are the only players left in India's aviation market. GoAir is dead. Spicejet is operating too few flights with lots of delays and cancellations so customers are not preferring it, Vistara is killed by Air India and Vistara's loyal customers don't really like Air India but they don't have a choice. Akasa Air market share hasn't crossed 5% so not really effective. Smaller players like Fly91, Star Air, Alliance are too small to have any impact.

So with no competition left, Air India and Indigo are in no mood to reduce the price. Even if we're willing to book 1 year in advance, there is no drop in prices. Mumbai-Mangaluru, Mangaluru-Hyd etc cost 10-11k return at the minimum and go up to 14, 17, 20k as travel dates near. Flying from Kerala to J&K, North East is more expensive than flying to Europe or South East Asia.

September 2024 India Domestic Aviation Market Share:

• Indigo holds 63% 
• Air India Group (AI + Vistara + Air India Express) 29.2 %, 
• Akasa 4.4%
• Spicejet: 2%
• Rest: 1.4% (fly91, Star, Alliance Air etc)

Except Spicejet, other airlines had about 70% on time performance and load factor of about 86%. Despite high ticket prices, 86% of the seats are full. Main reason why airlines won't reduce fares. [Source: ET]

Reason 02: Govt also hasn't paid any attention and don't want to regulate the aviation market. Govt could possibly put an upper limit but they won't.

Reason 03: The main reason is people are still flying despite high fares. Many travel for business so company pays for their flight, they don't care about ticket price, few rich, upper middle class are flying despite high ticket price as they prefer convenience and luxury over alternatives like train. A few remaining seats are taken by other middle class people forced to take a domestic holiday because of visa issues or not being able to plan international trips well in advance when air fare is low.

Reason 04: UDAAN seems to be a failure. Govt promoted regional connectivity under UDAAN scheme but many smaller airports hardly have a flight or two per day and the ticket price is too expensive compared to alternate option like bus and train, so takers are few,

So as long as seats are getting filled up, airlines have no motive to drop prices. Only if flights go empty, there will be a price reduction.

Besides air ticket cost, cost of Airport taxi, cost of food inside airport also have increased.

Impact of high domestic airfares

- Loss for hotel, taxi, tourism industry- If domestic flights are expensive and international is cheaper, people will fly abroad, resulting in loss for domestic tourism industry. Hotels, taxi drivers, tour operators etc will have fewer customers

- Lesser international tourists- If international tourists sense that flying to Thailand, Indonesia etc are a lot cheaper and attractive than exploring India, they won't plan India tour

- Lesser revenue to airports. Airports charge on a per passenger basis. If more people book tickets, airports get higher revenue. If fewer people fly, airport revenue will drop

- Lesser tax money to Govt. If people fly abroad and spend their money there. govt gets lesser tax revenue, compared to someone spending within India.

- Cost of running a business goes up as employee travel expenses rise. Ultimately cost of product/service we buy will increase.

What can we do as flying public?

#1 Cut domestic flights and holidays, fly abroad when you spot a cheap deal. Only if seats go empty airlines wake up and reduce fare.

#2 Try overnight train instead of flights as the savings are huge. (Along with price difference you will also save on airport taxi, food purchase etc as these are cheaper in train)

#3 Always look for price from a nearby airport. Like flying out of Mangalore airport is very expensive but flights from Calicut, Kochi or Mumbai are a lot cheaper- so if you can take a train to these cities you can fly out for a lot less. A bit of inconvenience but savings are huge. 

#4 Try to plan your trips well in advance. Most international airlines run sales and sell tickets for lot cheap if you can commit to it 6-9 months in advance. Air Arabia, VietJet Air, Air Asia and many other airlines sell international tickets for a lot cheaper during their sale. Do your research, keep your preferences ready and book when you see a cheap fare.

Let me know your thoughts.