June 6, 2024

Int’l airfares up as Ukraine crisis sees oil prices spike

Int’l airfares up as Ukraine crisis sees oil prices spike
MUMBAI: Airfares to international destinations have soared along with the rise in oil prices following the Russia-Ukraine crisis, but on the domestic routes, the recent hike in airfares can be attributed to an increase in bookings, said travel industry officials on Friday. In January, during the third Covid wave, domestic airfares crashed with a drop in demand.
Currently, airfares are capped up to 15 days, so airlines offered dirt cheap tickets for travel two weeks out. That is, if you look up domestic fares today, you will find comparatively cheaper fares on dates 15 days out, from March 20 onwards.
Till recently a Mumbai-Delhi return ticket booked 15 days or more in advance cost Rs 5,500, but now it costs Rs 10,500. Similarly, the cheapest 15-day advance purchase return fare on the Mumbai-Kochi flights was priced around Rs 4,300; it costs over Rs 15,000 now. Fares on travel within 15 days are much higher.
“Some of the international carriers were fast enough to increase their airfares due to the fuel price increase during this week and the same is expected to rise further, in an event the fuel prices go up more. The domestic fares have yet to see the impact of the fuel price rise. The current jump in airfares within India is seen due to the increased passenger load factors on flights,” said Jay Bhatia, vice-president, Travel Agents Association of India.
Meanwhile, credit rating agency ICRA said it expects a strong year-on-year growth of about 50-55% in domestic passenger traffic in FY2022, though the volumes will be significantly lower than pre-Covid levels. The recovery to pre-Covid levels is expected only by FY2024, it said.
The recovery is expected to be supported by pent-up demand in the leisure travel segment and gradual recovery in business travel as corporate offices move towards the resumption phase, post the third wave, it added.
“Sharp rise in crude oil prices and its resultant impact on aviation turbine fuel continues to play spoilsport for the industry, with recovery process already hindered by recent Omicron wave albeit briefly,” it said.