Troubles For Passengers Increase As Domestic Air Fares Continue To Rise, Says Report

The DGCI revealed that by July 2024, IndiGo and Air India emerged as the dominating forces in the domestic air passenger market, controlling more than 90 per cent of it

The competition on domestic flight routes is decreasing and this has resulted in a rise in air fares. This decline in competition for air routes is being considered the main reason why airlines are increasing their fares aggressively.

A report by Cirium, an aviation analytics firm, found that 69.2 per cent of domestic routes logged lesser competition in April 2024, as compared to 55.2 per cent clocked in April 2019 period. This showed that the number of flight routes with declining competition increased during the last five years, reported Business Standard.

What Led To Surge In Airfares?

As of April 2024, the study found that only 30.8 per cent of the 1,083 routes were serviced by more than one airline. This fall in competition has resulted in a major hike in the prices of flights, especially after the COVID-19 pandemic.

The study showed that the Delhi-Mumbai air route, for instance, saw average flight prices reduce by 20.5 per cent during the April 2019 to April 2023 period. However, on the same route, these fares climbed higher by 34.6 per cent in the last year itself. Meanwhile, the air route between Delhi and Bengaluru has witnessed a 53.1 per cent surge in average fares for economy class in the last year.

Problems In Domestic Aviation Market

After Jet Airways went bankrupt in 2019, Go First filed for insolvency in 2023. These events, along with the major disruptions faced by SpiceJet due to financial crisis, resulted in many domestic air routes being dominated by fewer carriers. The Directorate General of Civil Aviation revealed that by July 2024, IndiGo and Air India emerged as the dominating forces in the domestic air passenger market, controlling more than 90 per cent of it.

Now that the competition in the market has reduced, carriers are prioritising profit and focusing their efforts on achieving higher yields in the form of average revenue per passenger per kilometre. This has shifted the focus from providing lower airfares to passengers.