Air travel turns more affordable as jet fuel prices see a decline
MUMBAI: Cheaper jet fuel made air travel more affordable in July, data from travel websites showed, aided by new flights, last-minute sales and the opening up of the Pakistani airspace.
Average one-way fares during July on domestic trunk routes were up to 40% lower from a year ago, data from online travel portal Ixigo showed, with Mumbaihyderabad fares down 39%, Mumbai-chennai 62% and Mumbai-bengaluru 33%.
Aloke Bajpai, Ixigo founder and chief executive officer, said average July fares for domestic and international flights were also 40-45% below the fares seen in the June quarter. “Normalisation of fares can be attributed to domestic and international airlines launching new routes, which has helped in bridging the recent capacity gap,” said Bajpai, adding that last-minute ticket sales also pulled down fares.
Yatra.com data, however, showed that fares on key domestic routes such as Delhi-mumbai and Delhi-hyderabad have fallen marginally in the past year. According to Yatra, average Delhi-mumbai fare in July fell a mere 1.31% from a year ago, while Mumbai-delhi fare fell by 1.8%. Delhi-mumbai fares are typically rigid due to high demand.
“Domestic routes have witnessed a decrease in airfares this year as compared to the same period last year. This decline can be attributed to the stabilisation of aviation turbine fuel (ATF) prices in 2019,” said Sharat Dhall, chief operating officer (B2C) of Yatra.com. Dhall said July, August and September typically see weak airfares in India as fliers avoid travelling during monsoons. Bloomberg data shows jet fuel prices at the Delhi airport, which comprises the bulk of an airline’s operating costs, fell to ₹61,200 a kilolitre on July 1, 2019 from ₹68,086 a kilolitre a year ago, down 10.11%.
The rupee has weakened 0.09% against the dollar in the past year, while crude prices have fallen 13.3%. The rupee closed at ₹68.87 against the dollar on Tuesday, with crude at $64.38 a barrel.
Airfares to key overseas destinations have fallen as well. According to Yatra, average Mumbai-bangkok airfare fell 34.58% in July from a year ago, while average Mumbai-singapore fare fell 9.88%.